Blog Posts
Labor and Employment
The Future of EEO-1 Reporting: EEOC Proposal Creates Compliance Questions
Every September, HR departments at employers with 100 or more employees have turned to the same task: pulling a fourth-quarter payroll snapshot, sorting the workforce into ten job categories, coding each employee by race, ethnicity, and sex, and filing the result with the Equal Employment Opportunity Commission. The EEO-1 report has been a fixture of federal workplace compliance since 1966. By regulation, it is due no later than September 30. This September, employers are in an unusual position. The regulation still says the report is due. The agency that enforces the regulation has proposed eliminating it. And as of early September, the EEOC’s data collections page still reads “The 2024 EEO-1 Component 1 Data Collection is CLOSED,” with a promise that updates on the 2025 collection will be posted “as they become available.” The portal that would allow anyone to comply with the September 30 deadline has not opened, and no filing window has been announced. Welcome to compliance in the interregnum. What the EEOC Has Proposed On July 21, 2026, the Commission voted 2-1, along party lines, to issue a proposed rule rescinding the EEO-1 report along with its counterparts for unions (EEO-3), state and local governments (EEO-4), public school systems (EEO-5), and higher education. The proposal also would eliminate the recordkeeping and record-preservation requirements that supports those reports. The Commission's stated rationale goes further than a burden argument, though the burden numbers are real: the EEOC's own 2023 estimate put annual compliance at roughly $273 million and more than five million reporting hours. The proposal also states that the Commission has preliminarily determined the reports are inconsistent with equal employment opportunity law and potentially unconstitutional, on the theory that collecting race and sex data absent a specific allegation of discrimination sits in tension with Title VII's colorblind mandate. That framing matters. An agency that has said its own form may be unconstitutional is not likely to reverse course on the strength of comment letters. The proposal was published in the Federal Register on July 23, 2026, opening a 30-day comment period that closed on August 24, 2026. A public hearing was held on August 11, 2026. The next step is a final rule, which may or may not track the proposal and may or may not arrive before September 30, 2026. What Has Not Changed This is the part employers tend to skip past, and it is the part that matters. The regulation is still on the books. A proposed rule has no legal effect. Until a final rule is published and takes effect, 29 C.F.R. § 1602.7 continues to require covered employers to file. The EEOC may resolve the tension by opening the portal, by announcing a delay, or by finalizing the rescission. It has not done so yet, and employers should not assume that silence equals relief. The data is still required for other purposes. Even if the EEO-1 disappears tomorrow, the EEOC retains authority to request workforce demographic information in the course of a charge investigation or enforcement action. An employer that stops collecting the data because it no longer has to report it will find itself unable to respond when the same agency asks for it in a narrower, higher-stakes context. State law is unaffected. California's pay data reporting regime applies to employers with 100 or more employees and at least one California employee, and its 2026 amendments tightened storage rules and penalties. Massachusetts requires large employers to submit a copy of their federal EEO-1 to the Commonwealth. Illinois has its own equal pay certification process. None of these depend on the federal report continuing to exist, and several assume that the underlying data will be maintained. The federal contractor threshold is already gone. The separate obligation for federal contractors with 50 to 99 employees was tied to Executive Order 11246, which was revoked in 2025. Contractors of that size filed anyway last cycle out of caution. Going forward, the 100-employee threshold is the operative one for everybody, regardless of what happens to the rescission. The Quieter Risk: Losing the Data You Need There is a tendency to view the EEO-1 purely as a reporting burden. It is also, for many employers, the only structured demographic dataset the organization maintains. That dataset does work unrelated to the EEOC. Consider the reduction in force. An adverse impact analysis, the statistical check on whether selection criteria disproportionately affect a protected group, depends on knowing the demographics of the workforce before and after. Employers that conduct that analysis do so because it is the single most effective way to identify a problem before a plaintiff's expert does. Employers that stop collecting the data lose the ability to run it. The same is true of pay equity reviews, promotion analyses, and the internal audits that support a good-faith defense when a pattern-or-practice claim arrives. The EEOC's proposal does not change the substantive law. Title VII, the ADA, GINA, and the Pregnant Workers Fairness Act remain fully in force. The proposal changes only whether the government collects the data in advance. It does not change whether the data will matter when a dispute arises. The Practical Takeaway For September, the guidance is unglamorous: Prepare to file. Have the Q4 2025 snapshot data ready in filing format. If the portal opens with a short window, as it has in recent years, employers who waited for certainty will be scrambling. Do not stop collecting. Maintain self-identification processes and keep the demographic dataset current. Store it separately from personnel files, restrict access to those with a legitimate need, and make sure it does not flow to hiring or promotion decision-makers. That last point addresses the Chair's concern directly, and it is good practice regardless of what happens to the report. Inventory your state obligations. Determine which state and local reporting or certification regimes apply to your footprint and confirm that your data collection satisfies them independently of the federal form. Watch for the final rule, and for what follows it. A final rescission may draw litigation. It may also draw a Congressional Review Act resolution, though that would require a presidential signature to take effect. Employers should expect the landscape to shift again before it settles. Sixty years is a long run for any government form. The EEO-1 may be nearing its end. But the questions it was designed to answer, about who works where and whether the numbers tell a story, are not going anywhere. Employers who treat the rescission as permission to stop asking those questions are trading a reporting obligation for a litigation one.
September 21, 2026
Labor and Employment
When the Algorithm Recommends Termination: Employer Liability for AI in Hiring, Discipline, and Performance Management
Employers have moved quickly to bring artificial intelligence into parts of the employment relationship that used to depend entirely on human judgment. Applicant tracking systems now score resumes before a recruiter sees them. Scheduling and productivity platforms flag employees as underperforming based on keystroke counts, call times, or delivery windows. Performance management tools generate draft write-ups, and in some organizations, recommend whether an employee should be coached, placed on a performance improvement plan, or terminated. The efficiency case for these tools is obvious. The legal exposure they create is less obvious, and it is growing. The core problem is not that AI is involved in employment decisions. It is that AI outputs are increasingly being treated as conclusions rather than inputs, and that shift changes how those decisions look in a deposition, an EEOC position statement, or a jury instruction. The Employer Cannot Delegate the Decision Title VII, the ADA, the ADEA, and their state and local counterparts all impose liability on the employer, not on the software the employer purchased. An employer cannot defend a discrimination claim by pointing to a vendor’s algorithm and arguing that a machine, not a person, made the call. Regulators have already made this point explicit. The EEOC has stated that employers remain responsible for adverse impact caused by algorithmic decision-making tools even when a third-party vendor built and maintains the tool. Several state laws, including New York City’s Local Law 144 governing automated employment decision tools, impose independent audit and notice obligations directly on the employer using the tool. That means the familiar advice to document a legitimate, nondiscriminatory reason for an adverse action now has a second layer. It is not enough that AI flagged the employee. The employer must show that a human reviewed the flag, understood why it was generated, and exercised independent judgment before acting on it. A termination file that says only “system-generated performance score of 2.1, employee terminated” is a much harder file to defend than one that documents what a manager actually observed and considered. Disparate Impact Hides Inside the Model Disparate treatment claims require some evidence of intent, but disparate impact claims do not, and AI-driven employment tools are a natural fit for disparate impact theories. A scoring model trained on historical performance or attrition data can quietly reproduce whatever bias existed in that history. A resume screening tool can learn to penalize employment gaps, certain schools, or language patterns that correlate with protected characteristics even though the model was never told to consider race, sex, age, or disability directly. The practical exposure here is twofold. First, if a plaintiff’s counsel obtains statistical evidence that an AI tool selects or rejects candidates or employees at meaningfully different rates across protected groups, the employer will need validation data showing the tool is job related and consistent with business necessity, the same standard that has applied to any selection device since Griggs v. Duke Power Co. Vendors rarely provide this validation data unprompted, and employers frequently discover during litigation that they never asked for it. Second, an employer that never tested its own tool for adverse impact will have a difficult time arguing it acted reasonably, even where no discriminatory intent existed. Ignorance of how the tool works is not a defense; in a disparate impact case, it can be the plaintiff's best evidence that no one was minding the store. Discovery Now Reaches Further Than the Personnel File AI adoption expands what is discoverable in an employment case well beyond the traditional personnel file. Prompts entered by HR or supervisors, model outputs and confidence scores, version histories showing when a scoring model was retrained, and internal communications about why an alert was or was not acted on are all now fair game. Plaintiffs’ counsel is increasingly requesting this material specifically, because it can show not just that an adverse outcome occurred, but what the company knew and when. This creates a preservation problem many employers have not yet solved. Some platforms overwrite scoring history as new data comes in or retain outputs only briefly by default. If a company has no policy governing retention of AI-generated employment data, it may find itself unable to produce records that plaintiffs assume exist, inviting a spoliation argument, or it may find that the only surviving record is an unfavorable one that a human reviewer never actually relied upon but that now looks, in hindsight, like the smoking gun. Practical Governance Closes the Gap None of this counsels against using AI in employment decisions. It counsels against using it without a governance structure built for the way these tools will actually be examined after the fact. At a minimum, employers should be able to show that a person with real authority to disagree reviewed any AI-generated recommendation before it became a personnel action, that the tool has been validated or at least tested for disparate impact on a periodic basis, that managers are trained to document their own independent reasoning rather than simply citing the tool's output, and that retention practices for AI-generated data are deliberate rather than accidental. Where a jurisdiction imposes specific notice, bias audit, or disclosure obligations on automated employment decision tools, those requirements need to be built into the rollout, not addressed after a candidate or employee complains. The employers best positioned when one of these tools produces a bad outcome are the ones who can show, with contemporaneous documentation, that a human being was accountable for the decision the whole way through. The tool can inform that judgment. It cannot substitute for it, and the law has no intention of letting it try.
August 27, 2026
Labor and Employment
When Does the Commute Count? What Two New DOL Opinion Letters Mean for Flexible Schedules
Employers have been asking a version of the same question for years: If we let employees split their day between home and the office, or let a field employee handle calls before getting in the car, are we suddenly on the hook to pay for the drive? On August 6, 2026, the Department of Labor's Wage and Hour Division answered that question twice, in two opinion letters (FLSA2026-9 and FLSA2026-10) that reach opposite conclusions on similar facts. Read together, they give employers a genuinely useful roadmap for structuring flexible and hybrid schedules without accidentally converting an employee's commute into paid working time under the Fair Labor Standards Act. The Employee's Choice: Mid-Day Commuting Stays Unpaid The first letter deals with a familiar hybrid-work scenario. Employees want to work part of the day from home and part from the office, timing their drive to dodge rush hour rather than sitting in traffic during the worst of it. The employer worried that under the FLSA's continuous workday doctrine, once an employee clocks in for the day, any travel before clocking out again becomes compensable, even if it is really just a commute that happens to fall in the middle of the day rather than at the beginning or end. WHD said no. When the employee decides when to travel and that decision is driven by personal preference rather than any work demand, the trip remains what it has always been: an ordinary commute. It does not matter that it happens mid-shift. The agency went further and effectively created a third bucket of non-compensable time that exists alongside off-duty periods and bona fide meal breaks: voluntary, employee-driven travel that falls inside the continuous workday but outside the definition of "hours worked." This is a meaningful win for employers trying to offer real flexibility. It confirms that letting people avoid gridlock, or duck out mid-afternoon to handle something at home before logging back in later, does not by itself create new wage exposure. The Employer's Control: Travel Bookended by Required Work Gets Paid The second letter tells a different story, and the contrast is the point. Here, a field service engineer with no fixed office spends up to an hour most mornings on the phone, fielding pages, and scheduling appointments with clients and colleagues, before ever leaving the house in a company vehicle to reach the first job. WHD found that the scheduling calls themselves are compensable because they are integral to the engineer's actual job of installing and servicing equipment. More importantly for scheduling purposes, the drive that follows is compensable too, because the employer requires substantial work immediately before and immediately after the travel, and because the employer, not the employee, controls when and how that travel occurs. Notably, WHD drew a line even within this letter. Simply receiving pages during the drive was treated as incidental to using an employer-provided vehicle and did not, by itself, trigger compensability. The dividing line the agency keeps returning to is not the mere presence of a phone or a laptop during the commute; it is whether the employer is dictating the timing of the trip and sandwiching it between required work. Reading the Two Letters Side by Side Both opinion letters apply the same "primary beneficiary" framework that has guided FLSA travel-time analysis for decades, and both reach different results because of who is actually calling the shots. Where the employee sets the schedule, and the travel serves the employee's own convenience, the trip stays an ordinary, unpaid commute even if it happens smack in the middle of a workday. Where the employer sets the schedule and requires real work on both ends of the drive, the travel loses its status as an ordinary commute and becomes paid time. What This Means for Employers Right Now For employers running hybrid schedules, offering flexible start and end times, or managing a field-based workforce, these letters offer something rarer than most agency guidance: a clear, factor-based test that can actually be built into policy. The safest ground is genuine employee choice over the timing of travel, paired with no requirement to perform work immediately before or after the drive. The moment an employer starts dictating when someone has to leave, or requiring calls, paperwork, or scheduling tasks right up against the commute, the analysis shifts and the travel time risk goes up. It is worth remembering that opinion letters are not binding law, but they do carry real practical weight. An employer who structures a policy consistent with an opinion letter and later faces a Fair Labor Standards Act claim on the same facts has a strong argument against a finding of willfulness, which can matter enormously for liquidated damages and the statute of limitations. It is also worth remembering that these letters interpret federal law only. A number of states impose stricter rules on what counts as compensable travel time, so any policy built around this guidance still needs to be checked against state law before it is rolled out. Employers revisiting hybrid work policies, flexible scheduling, or field employee protocols in light of this guidance should take a close look at who actually controls the timing of the commute and what, if anything, employees are required to do immediately before or after they get in the car.
August 14, 2026
Labor and Employment
No Standard, Still Liable: How OSHA Regulates Ergonomics Without an Ergonomics Rule
Ask most employers what OSHA requires on ergonomics, and you will get one of two wrong answers. Some assume there is a detailed federal rulebook governing chair height, lifting limits, and keyboard angles. Others assume that because no such rulebook exists, ergonomics is purely voluntary, a wellness perk, not a legal exposure. Both are mistaken, and the gap between them is exactly where liability lives. Musculoskeletal disorders (MSDs), otherwise known as the strains, sprains, carpal tunnel cases, and back injuries that come from repetition, force, and awkward posture, remain one of the largest single categories of workplace injury, accounting for roughly a third of serious cases and costing employers billions each year in workers’ compensation, lost productivity, and medical expenses. Yet the federal framework governing them is defined more by what is absent than by what is written down. Understanding that absence is the whole game. Ergonomics Program Standard For one decade-spanning moment, federal ergonomics regulation was real. OSHA promulgated a comprehensive Ergonomics Program Standard at the end of 2000, requiring covered employers to identify and control MSD hazards. It survived a matter of weeks. In early 2001, Congress invoked the Congressional Review Act and passed a joint resolution rescinding the rule, which the President signed. The CRA repeal did more than erase the standard. By its terms, the Act bars an agency from reissuing a rule in “substantially the same form” without fresh congressional authorization. That single procedural feature is why, a quarter-century later, there is still no federal ergonomics standard — and why one is unlikely to appear through ordinary rulemaking. OSHA did not decline to regulate ergonomics. It was statutorily disarmed from doing so the conventional way. The General Duty Clause What is left in OSHA’s arsenal is Section 5(a)(1) of the OSH Act, the General Duty Clause, which requires every employer to furnish a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” The clause is OSHA’s catch-all: it reaches recognized, serious hazards for which no specific standard exists. Ergonomics is the textbook example, sharing that territory with heat illness, workplace violence, and combustible dust. For a labor and employment audience, the operative point is that a General Duty Clause citation is not a free-floating accusation that a workplace felt unsafe. OSHA must establish four elements: A condition or activity in the workplace presented a hazard to employees The employer or its industry recognized that hazard The hazard was causing, or was likely to cause, death or serious physical harm A feasible and useful means existed to materially reduce the hazard Each element is a defense opportunity, and the second and fourth are where ergonomics cases are usually won or lost. “Recognition” can be proven through the employer’s own injury logs, prior complaints, internal ergonomics assessments, or industry consensus materials and NIOSH guidance. “Feasibility” turns on whether a workable engineering or administrative control (i.e., job rotation, lift assists, workstation redesign, or pacing changes) actually existed and was reasonably available. An employer that can show it identified its risks and was implementing reasonable controls in good faith is in a fundamentally different posture than one that did nothing. The Quieter Enforcement Levers The General Duty Clause is the headline mechanism, but it is not the only one, and it is important not to overlook the supporting cast. Recordkeeping obligations under 29 C.F.R. Part 1904 require accurate logging of work-related MSDs. A failure to record can be an independent citation, and an inaccurate log undercuts the credibility of every other defense an employer might raise. The hazard alert letter deserves particular attention because of how it compounds. When OSHA observes ergonomic risk that it is not prepared to cite outright, it may issue a hazard alert letter — a "no-impact" document carrying no fine and no immediate citation history. It is tempting to file and forget. That is a trap. If the agency returns and finds the flagged hazards unaddressed, the prior letter supplies the knowledge element that can elevate a later citation to willful. There is no formal mechanism to contest the letter’s findings, so the practical response is to treat it as a litigation exhibit in waiting: conduct a documented assessment, implement corrective action, and preserve proof of both. What Is Actually Changing in 2025–2026 Two developments make this an unusually live area rather than a settled one. First, in July 2025, OSHA proposed narrowing its own General Duty Clause interpretation, carving out hazards that are “inherent and inseparable from the core nature of a professional activity or performance” —aimed at inherently risky pursuits like certain entertainment and athletic work. The comment period drew enough interest that OSHA extended it and scheduled a public hearing. For ergonomics specifically, the early read from the defense bar is that this changes little: the MSD hazards in warehousing, healthcare, meatpacking, and manufacturing are not “inherent and inseparable” from the core work in the way the proposal contemplates, so robust General Duty Clause enforcement in those sectors is expected to continue. Still, the proposal signals a broader judicial and administrative skepticism toward expansive use of catch-all clauses — a theme worth tracking in any 5(a)(1) defense. Second, and more consequential, the states are filling the federal vacuum. Roughly five states now maintain ergonomics standards of some form, including California, Oregon, Washington, Michigan, and Minnesota, and the recent activity is concentrated in the last two. Minnesota's statute (Minn. Stat. § 182.677) is the one to know. Effective January 1, 2024, it requires covered employers in three high-MSD sectors (warehouse distribution centers, meatpacking and poultry processing sites, and licensed health care facilities), each above defined headcount thresholds, to maintain a written ergonomics program with risk assessments, training, and early-reporting procedures. It layers on a five-year first-aid log requirement and ties enforcement into the state's existing AWAIR safety-program framework, with safety committee obligations triggered above certain incidence rates. This is precisely the kind of prescriptive, documentation-driven mandate the repealed federal rule once contemplated, now operating at the state level. Washington is moving more incrementally but deliberately. Its Department of Labor & Industries regained authority to issue ergonomics rules and may promulgate one rule per year, targeting industries whose workers’ compensation MSD claim rates run at more than twice the statewide average, with effective dates from mid-2026 onward. Multi-state employers can no longer assume a single national compliance posture; the obligations now vary materially by where the work is performed. Enforcement at the federal level, meanwhile, has not gone dormant. OSHA’s high-profile resolution with Amazon, which included committing to facility-wide ergonomic abatement including adjustable workstations, anti-fatigue flooring, and job rotation, demonstrated the agency’s willingness to pursue ergonomic hazards against even the largest employers through the General Duty Clause, and effectively set a reference point for what “feasible controls” look like in high-throughput logistics. The Practical Takeaway The recurring misconception is that “no standard” means “no duty.” It never did. The combination of an active General Duty Clause, recordkeeping obligations, hazard alert letters that ripen into willful-violation predicates, and a growing patchwork of state mandates produces a real and enforceable framework, just one assembled from parts rather than handed down as a single rule. For employers, the defensive posture writes itself: identify ergonomic risks proactively, prefer engineering and administrative controls over PPE, document assessments and corrective action contemporaneously, and respond to hazard alert letters as if they were citations-in-waiting. Good-faith, documented effort is not merely good safety practice: under the four-element test, it is the difference between a defensible record and a willful citation. The federal government may not have written the ergonomics rulebook. But it has built, piece by piece, a regime that holds employers to one all the same.
July 9, 2026
Labor and Employment
Three Jurisdictions, Three Timelines: What the DMV’s Shifting Leave Laws Mean for Employers
For years, employers in the Washington metropolitan area could treat paid family and medical leave as a “somewhere else” problem, an issue for companies with workforces in California, New York, or New Jersey. That era is over. As of this spring, an employer with even a handful of employees spread across Maryland, Virginia, and the District of Columbia is now managing three separate leave regimes, each built on a different funding model, each carrying different obligations, and, perhaps most challenging of all, each operating on its own clock. The result is a compliance puzzle that a single, one-size-fits-all leave policy simply cannot solve. Below is a snapshot of where each jurisdiction stands and what the calendar looks like heading into 2027 and 2028. Washington, D.C. The Established Program You Cannot Put on Autopilot Of the three jurisdictions, the District's program is the most mature, and, for that reason, the one employers are most likely to take for granted. D.C.’s Paid Family Leave program has been paying benefits since 2020 and is administered by the Office of Paid Family Leave within the Department of Employment Services. A few features distinguish it from its neighbors. First, D.C.’s program is funded entirely by employers; there is no employee payroll deduction. The current contribution rate is 0.75% of each covered employee’s gross wages, remitted quarterly through the Employer Self-Service Portal, with payments due at the end of the month following each quarter (April 30, July 31, October 31, and January 31). Second, eligible employees can access up to 12 weeks each of family, medical, and parental leave, plus two weeks of prenatal leave, with partial wage replacement up to a weekly maximum that the District adjusts periodically. The compliance trap here is complacency. The contribution rate has changed more than once in recent years, the maximum weekly benefit is adjusted over time, and the D.C. PFL statute itself does not provide job protection, that has to be layered in through the D.C. and federal FMLA. Employers who set up their payroll years ago and stopped paying attention are the ones most likely to be out of step. Ongoing obligations still require ongoing attention: timely quarterly filings, current rate application, and the required employee notice. Maryland A Long-Delayed Launch That Is Finally on the Horizon Maryland’s Family and Medical Leave Insurance (FAMLI) program has been a moving target in the region. Enacted in 2022, its implementation dates have been repeatedly pushed back; most recently, in response to federal actions affecting the timeline. For employers who tuned out during the delays, now is the moment to tune back in, because the runway is getting short and the final regulations took effect March 30, 2026. Here is the current timeline that matters: Fall 2026: Employer registration opens. Any employer with at least one employee in Maryland will be required to register (there are no exceptions) and will need to designate an Authorized Officer and decide between the State Plan and an approved private plan. January 1, 2027: Payroll contributions begin. The total contribution rate is 0.9% of covered wages, split evenly between employer and employee (0.45% each). Small employers with fewer than 15 employees are exempt from the employer share, but their employees still contribute. January 3, 2028: Benefits become available. Eligible employees (generally those who have worked at least 680 hours in Maryland over the prior four quarters) can receive up to 12 weeks of paid leave (with the possibility of an additional 12 weeks for parental bonding in certain circumstances), capped at $1,000 per week. The practical takeaway for Maryland employers is that the meaningful work happens well before benefits ever get paid. Registration this fall, payroll-system readiness for the January 2027 contribution start, the State-Plan-versus-private-plan decision, and employee notices all land in the next several months (and not in 2028). Virginia The Newcomer That Changes the Regional Calculus The biggest development of 2026 came out of Richmond. In April, Virginia became the first state in the South to enact a statewide paid family and medical leave program, and it paired that with a significant expansion of paid sick leave. Employers who have long viewed Virginia as the “light touch” jurisdiction in the region will need to recalibrate. Paid Family and Medical Leave. Administered by the Virginia Employment Commission, the PFML program will begin collecting payroll contributions on April 1, 2028, and will begin paying benefits on December 1, 2028. When it takes effect, eligible employees may receive up to 12 weeks of leave per year with wage replacement of 80% of average weekly wages, subject to a cap tied to the statewide average weekly wage (roughly $1,500 per week under current figures, adjusted annually). Contributions are shared between employers and employees; employers with 11 or more employees must remit both portions (deducting up to half from employees), while employers with 10 or fewer are not required to pay the employer share. The program includes job-protection and benefit-continuation rights for employees who have been on the job at least 120 days, and it offers a private-plan alternative for employers who prefer to self-administer. Contribution rates have not yet been set—the VEC must finalize regulations and rates before the program launches—so the exact cost remains to be seen, though early estimates put it under 1% of wages. Paid Sick Leave—and this one comes sooner. Just as important for planning purposes, Virginia’s new paid sick leave mandate takes effect July 1, 2027. It expands the state's existing sick-leave requirement (which previously reached only certain home health workers) to nearly all private-sector employees and state and local government employees. Employees will accrue at least one hour of paid sick leave for every 30 hours worked, and the law expressly covers “safe leave” for employees dealing with domestic violence, sexual assault, or stalking. Notably, the enforcement provisions have teeth: aggrieved employees may recover double the amount of any unpaid sick leave plus actual damages, and the law prohibits retaliation. Because the sick-leave obligation arrives in mid-2027 (well before the PFML program goes live), Virginia employers effectively have two distinct deadlines to manage, not one. Why the Differences Are the Whole Point It would be convenient if these three programs converged. They do not. Consider just a few of the fault lines a multi-jurisdiction employer has to navigate: Who pays. D.C. is employer-funded only. Maryland and Virginia split contributions between employer and employee, but with different rates, different small-employer carve-outs (fewer than 15 in Maryland, 10 or fewer in Virginia), and different wage caps. Job protection. Maryland and Virginia build reinstatement rights into their statutes. D.C.'s PFL does not, leaving job protection to the FMLA framework. Timing. An employer running payroll across all three is looking at ongoing quarterly obligations in D.C. right now, Maryland contributions starting January 2027, Virginia sick leave in July 2027, and Virginia PFML contributions in April 2028. State plan versus private plan. Both Maryland and Virginia allow approved private plans as an alternative to the state program. That decision, which carries cost, administrative, and renewal implications, needs to be made deliberately, not by default. Layered on top of all this is the coordination problem: each of these programs interacts with the federal FMLA, with existing employer PTO and short-term disability policies, and with one another. Getting the concurrency and stacking rules wrong is where liability tends to accrue. What Employers Should Be Doing Now The through-line across all three jurisdictions is that the compliance work front-loads. Waiting until benefits start paying is waiting too long. In the coming months, employers with a regional footprint should be inventorying which employees fall under which program, confirming payroll readiness for the Maryland and Virginia contribution start dates, evaluating private-plan options, updating handbooks and leave policies to reflect the new entitlements, preparing the required employee notices, and training HR and managers on the accrual, coordination, and anti-retaliation rules.
July 6, 2026
Labor and Employment
"The Pitt" is a Hospital Drama. It’s Also a Masterclass in Employment Risk
Like most good TV hospital dramas, "The Pitt" is not really about medicine. It is about pressure. The show captures what happens when employees are overextended, managers are operating in constant crisis mode, and organizational systems begin to strain under the weight of staffing shortages, emotional exhaustion, and impossible expectations. The setting may be a hospital emergency department, but the legal issues are recognizable to virtually every employer. What makes the series especially interesting from a labor and employment perspective is how many of its workplace tensions intersect with real legal obligations. Take burnout. For years, employers treated burnout as a retention problem or a culture issue. Increasingly, however, burnout-related concerns arrive wrapped in legal protections. An employee struggling with anxiety, depression, PTSD, or other mental health conditions may trigger obligations under the ADA. Extended stress-related absences may implicate the FMLA. Complaints about chronic understaffing or unsafe workloads may become protected activity under workplace safety laws or the National Labor Relations Act. The law has not suddenly become more forgiving of operational strain simply because employers are understaffed. If anything, courts and agencies have become more skeptical of workplaces that normalize exhaustion as part of the job. "The Pitt" also illustrates a common but underappreciated source of liability: supervisors under pressure. Employment claims are often shaped less by formal policy and more by how frontline managers respond in moments of stress. A dismissive reaction to a complaint, inconsistent discipline, public criticism, or poorly handled accommodation requests can quickly become evidence in discrimination, retaliation, or hostile work environment litigation. Healthcare settings make this especially visible because the hierarchy is so compressed and the stakes are so immediate. But the broader lesson applies everywhere. Technical excellence is not the same as management training, and many organizations continue to promote high performers into supervisory roles without adequately preparing them for the legal dimensions of people management. The show also reflects the growing legal significance of employee complaints about workplace conditions. Discussions about staffing levels, scheduling, workload, safety, and compensation are often protected under Section 7 of the NLRA, even in non-union workplaces. Employers sometimes frame these issues as morale problems or negativity concerns when, legally, they may constitute protected concerted activity. That distinction matters. Particularly in high-pressure industries, retaliation claims increasingly emerge from situations where employees raised operational concerns, and management responded defensively. Another recurring theme in "The Pitt" is documentation — or, more accurately, the lack of it. In chaotic workplaces, documentation often becomes inconsistent until a complaint arises. By then, employers may attempt to reconstruct performance concerns after the fact, which rarely presents well in litigation. Courts, agencies, and juries tend to view sudden paper trails with suspicion, especially when they appear only after protected activity, leave requests, or accommodation discussions. Perhaps the most modern employment-law lesson embedded in the show is the importance of psychological safety. Employees who fear humiliation, retaliation, or professional consequences for speaking up are less likely to report concerns early, whether those concerns involve discrimination, harassment, or workplace safety. Regulators increasingly expect organizations to create reporting structures that employees actually trust enough to use. Ultimately, "The Pitt" works because it understands something many workplaces still resist acknowledging: prolonged crisis conditions reshape employment risk. Fatigue affects judgment. Stress alters communication. Staffing shortages expose compliance gaps. And cultures built around endurance rather than sustainability tend to create legal vulnerabilities long before litigation begins. The show may be fiction, but the workplace issues are painfully familiar. Just with better lighting and more trauma bays.
May 29, 2026
Labor and Employment
New Jersey Finalizes ABC Test Rule: A Measured Retreat, Not a Reset
After more than a year of delay and unusually forceful opposition from the business community, the New Jersey Department of Labor has adopted final regulations implementing the state’s “ABC” test for worker classification. The final rule reflects a meaningful course correction from the proposal first circulated in 2025. It is narrower, more measured in tone, and less overtly targeted at particular industries. But it does not alter the underlying premise. New Jersey continues to place a heavy burden on businesses seeking to classify workers as independent contractors, and these regulations reaffirm that approach with greater clarity rather than greater flexibility. Clarity Arrives — on the State’s Terms The regulations operate across multiple statutory schemes, including the state’s wage-and-hour, wage payment, and unemployment compensation laws. At their core is the familiar but demanding ABC test. A worker is presumed to be an employee, and the hiring entity must establish all three elements to rebut that presumption: that the worker is free from control in both contract and practice; that the work is performed outside the usual course or places of the company’s business; and that the worker is engaged in an independently established trade or business. The significance of the final rule lies less in redefining those elements than in codifying how the Department expects them to be applied. In doing so, the rule closes off ambiguity that had previously allowed employers to rely more heavily on contractual structuring and industry convention. A Noticeable Step Back from the Edge The most notable feature of the final rule is what it no longer says. In several respects, the Department retreated from positions that would have pushed New Jersey’s already stringent framework even further. Most visibly, the rule abandons the proposal’s use of industry‑specific examples. Those examples — focused on rideshare drivers, construction trades, and similar roles — had been criticized as outcome‑driven. Their removal restores a measure of neutrality, even if it also leaves employers with less informal guidance. Equally significant is the Department’s reversal on its approach to legal compliance. The proposed rule suggested that steps taken to comply with other legal obligations (such as training, supervision, or similar controls) could still weigh in favor of employee status. The final rule rejects that approach, making clear that compliance‑driven requirements are not, without more, evidence of control. This change is likely to have practical importance for employers operating in regulated industries. The final rule also abandons several interpretive positions that would have expanded the concept of “control” or “place of business,” including the suggestion that required use of company software is inherently indicative of control, or that off‑site work could nonetheless be treated as occurring at the employer’s place of business based on its importance to the enterprise. Taken together, these deletions suggest a more restrained (and more defensible) regulatory posture. Refinements at the Margins The Department also introduced clarifications that, while modest, are directionally helpful. The rule confirms that existing statutory exemptions remain intact, avoiding any suggestion that the regulatory framework displaces those carve‑outs. It also addresses remote work directly, explaining that a worker’s home is not automatically part of the employer’s place of business; a point that carries particular relevance in a post‑pandemic workforce. These changes do not alter the structure of the ABC test. They do, however, narrow the risk that ordinary, compliance‑driven, or modern workplace practices will be recast as evidence of employment. The Core Framework Remains Firmly in Place Notwithstanding these revisions, the substance of the regime remains unchanged in the respects that matter most for employers. The burden of proof continues to rest entirely with the business. The inquiry remains fact‑driven and cumulative, rather than formalistic. And, critically, the rule reiterates that commonly relied‑upon indicia of independent contractor status (including written agreements, the use of business entities, or even the existence of multiple clients) are not dispositive. In practice, the most difficult element will continue to be the requirement that the work fall outside the company’s usual course of business. Where a worker is performing the same core services that define the enterprise, the final rule offers little comfort. The revisions do not relax that standard; they merely clarify how it will be assessed. A Short Runway to Implementation The rule is expected to be published in June 2026 and to take effect on October 1, 2026. That timeline leaves a limited window for employers to reassess existing classifications. Given New Jersey’s long‑standing focus on misclassification, and its willingness to pursue significant enforcement actions, the expectation should be that the clarified standards will be actively applied. A More Tempered Rule, But No Easier Path In the end, the Department did not abandon its approach; it refined it. The final rule is less aggressive in tone and more attentive to practical business realities than the version initially proposed. It removes several features that had appeared designed to expand the reach of the ABC test at the margins. But the central proposition remains the same. New Jersey is not seeking to make independent contractor classification easier. It is seeking to make the rules clearer and ensure they are consistently enforced. For employers, that clarity is useful, but it also eliminates any remaining doubt about the rigor of the standard they are expected to meet.
May 7, 2026
Labor and Employment
It Ends Quietly: What the Lively-Baldoni Settlement Really Tells Us About Litigation
For nearly two years, this case unfolded the way modern legal disputes often do. Not in a courtroom, but in fragments and narratives. In articles, group chats, comment sections, and carefully curated statements. It felt, at times, like a story in search of an ending. But when the ending finally arrived, it was not a verdict. It was a settlement announced in a handful of sentences, issued jointly, and designed to close the door rather than resolve the conflict. No trial. No jury. No public reckoning of who was right. Instead, something quieter. And in many ways, far more revealing. What does it mean when a case settles right before trial? The timing matters. This case did not settle early, when uncertainty is highest and discovery has yet to sharpen the issues. It settled at the last possible moment, just weeks before a scheduled May trial, after the legal landscape had already shifted in a meaningful way. By that point, the court had done what courts do best. It stripped the case to its essentials. Of the original claims, 10 were dismissed, including the most visible, leaving only a narrow set of theories to be decided by a jury. What remained was not the sweeping narrative the public had been following. It was something much smaller. Something much more technical. Something that would have required jurors to answer precise legal questions about retaliation and contractual obligations rather than broader questions about conduct or character. And then, before any of those questions could be answered, the case ended. That sequence is not unusual. It is, in fact, typical. Once discovery is complete and the court has defined the case, the parties are no longer negotiating in the abstract. They are negotiating in the shadow of a very specific trial. One that now comes with clearer risks and fewer unknowns. In that environment, settlement is not retreat. It is recognition. Why would a high-profile case end without money changing hands? Perhaps the most surprising detail emerging from early reporting is the apparent lack of financial exchange between the parties. Each side reportedly walked away covering its own legal fees. That outcome can feel counterintuitive in a case defined by claims of massive reputational and economic harm. But it aligns with something lawyers understand instinctively, and the public often overlooks. Litigation is not a referendum on harm. It is a method for proving it. At various points in the case, the parties advanced dramatically different accounts of damages. One side spoke in terms of lost opportunities and reputational impact. The other questioned both the methodology and the underlying premise. By the time a case reaches the brink of trial, those claims are no longer theoretical. They have been tested, challenged, constrained by evidentiary rules and expert scrutiny. The result is rarely as expansive as the initial pleadings suggested. A no-payment resolution, in that context, does not mean nothing happened. It means something more specific. It reflects the gap between what could be alleged early and what could ultimately be proven in court. Did the settlement change anything or simply confirm what the court had already signaled? In many ways, the settlement feels less like a turning point and more like a conclusion to a process that had already narrowed the case substantially. The April ruling set the trajectory. It was not an early procedural decision. It was a merits-driven assessment after discovery, focused on what the record could actually support. That ruling reshaped the case in several important ways. It clarified that many of the claims failed for reasons grounded in legal structure rather than public perception. Employment status, jurisdiction, and contract formation all played decisive roles in determining what could proceed. At the same time, the court allowed certain claims to move forward, particularly those tied to retaliation and contractual obligations. Those surviving theories reflected something more subtle. A shift in where legal risk often resides in modern workplace disputes. The settlement did not undo any of that analysis. It accepted it. What does this case reveal about power, proof, and perception? Earlier, this litigation offered a useful lens into how power, proof, and perception interact. The settlement shows how that interaction resolves. Perception drove the public conversation. From the beginning, the case was understood through competing narratives that invited audiences to take sides long before the pleadings had settled. But perception did not determine the legal outcome. It could not expand jurisdiction. It could not convert an unsigned agreement into an enforceable contract. It could not substitute for admissible evidence. Proof did the work that proof always does. It narrowed. It filtered. It transformed broad allegations into discrete questions anchored in documents, communications, and contemporaneous records. By the time the case reached its final stage, what mattered was not how the story felt, but what could be demonstrated. Power remained present throughout, but not in the way it is often imagined. Influence shaped the stakes and the visibility of the dispute, but it did not rewrite the legal standards that governed it. The court applied the same framework it would apply in any workplace case, even if the setting was far from ordinary. The end result reflects that hierarchy. Perception set the stage. Proof controlled the script. Power influenced the audience, not the outcome. What lessons should employers and practitioners take from how this ended? Strip away the names and the attention, and what remains is a fairly familiar legal arc. A workplace dispute arises in a setting that blurs professional and personal boundaries. Allegations are made, both legal and reputational. The case expands quickly, incorporating multiple causes of action and overlapping narratives. Discovery follows, and with it a more disciplined examination of the evidence. The court narrows the issues. What survives is more precise, more technical, and often less satisfying to anyone looking for a sweeping resolution. From there, the incentives shift. The cost of trial becomes concrete. The risks are no longer abstract. And the question becomes less about proving everything and more about resolving what remains. This case also reinforces something increasingly important. Even where underlying misconduct claims fall away, retaliation theories can persist. The alleged harm is not always tied to traditional employment actions. It may instead center on reputation, messaging, and the way narratives are managed in public spaces. That evolution matters because it expands the kinds of conduct that may be examined through a legal lens, even when the original allegations do not move forward. Why does this ending feel so incomplete? Because it is. Settlements are designed to end disputes, not to explain them. They provide closure without resolution, finality without full transparency. They are, by their nature, unsatisfying for anyone seeking a definitive account of what happened. And yet, they are the most common ending to cases like this. In that sense, the conclusion here is entirely consistent with the system in which it unfolded. The case did not fail to deliver an answer. It delivered the answer the legal process is structured to give. A narrowing of claims. A testing of proof. A recalibration of expectations. And, ultimately, a decision to stop litigating before the final question is put to a jury. What is the real takeaway from how this case ended? The title of the film at the center of the dispute suggests a clean conclusion. A moment where something definitively ends. The litigation tells a different story. It suggests that in modern workplace cases, especially those that unfold in public view, resolution rarely comes in the form people expect. It does not arrive with a clear declaration of fault or vindication. It arrives more quietly, shaped by legal constraints, evidentiary realities, and the practical considerations that define every case once it moves from narrative to proof. What began as a story about conduct became a case about law. What felt expansive became precise. What seemed headed toward a dramatic ending instead resolved in silence. Not because the issues disappeared. But because, in the end, litigation only answers the questions it knows how to ask.
May 7, 2026
Labor and Employment
Labor and Employment State Law Watch: Key Changes & Trends
Below is a roundup of recent labor and employment law developments, regulatory updates, and notable workplace trends that may affect employers and human resources professionals, with a focus on compliance considerations, risk management, and emerging issues shaping the modern workplace. Maine Paid Family and Medical Leave Benefits Become Available - Effective May 2026 Maine is implementing a comprehensive paid family and medical leave (PFML) program, with employee benefits becoming available beginning in May 2026. The law establishes a statewide system allowing eligible employees to take up to 12 weeks of job-protected, paid leave in a benefit year for specified family, medical, and personal safety reasons. The program is administered by the Maine Department of Labor and funded through employer and employee payroll contributions, which began in January 2025. Eligibility is based on an employee’s earnings during the applicable base period (generally the first four of the five most recently completed calendar quarters), and the law applies broadly to nearly all Maine employers. Covered leave includes an employee’s own serious health condition, bonding with a new child, caring for a family member with a serious health condition, certain military-related needs, and “safe leave” for issues related to domestic violence, sexual assault, or stalking. The 12-week cap applies in the aggregate across all qualifying leave types. The law effectively creates a state-administered wage replacement and job protection framework, requiring employers to integrate PFML into existing leave policies and workforce planning. While the state administers benefits, employers remain responsible for payroll compliance, job restoration obligations, and coordination with other leave laws such as the federal Family and Medical Leave Act. Action Items: Employers should confirm compliance with payroll contribution requirements and ensure systems are properly configured. Leave policies should be updated to incorporate PFML rights and coordination with existing PTO and FMLA policies. Employers should also train HR personnel on eligibility determinations, job protection requirements, and claims coordination, and begin planning for staffing coverage during employee absences once benefits become available. New York Secure Choice Savings Program Registration Deadline - Effective May 15, 2026 New York is advancing its state-facilitated retirement initiative by imposing a firm deadline for mid-sized employers. Under the Secure Choice Savings Program, employers with 15 to 29 employees that do not sponsor a qualified retirement plan must register and participate in the program. The law effectively deputizes employers into facilitating employee retirement savings through payroll deductions, even where the employer has opted not to offer its own plan. While the program does not require employer contributions, it does require administrative coordination and ongoing compliance. Action Items: Employers in scope should promptly register for the program, ensure payroll systems can accommodate required deductions, and prepare employee communications. Employers that prefer greater plan flexibility may wish to consider implementing a private retirement plan instead. Utah Expanded Restrictions on Non-Compete Agreements - Effective May 6, 2026 Utah has enacted targeted legislation significantly limiting the enforceability of non-compete agreements in certain professional sectors. Health Care Workers (HB 270): Employers may no longer require licensed health care workers to enter into non-compete agreements. The law also prohibits non-solicitation provisions that would prevent these workers from informing patients of their current or future place of employment. This represents a notable shift toward prioritizing patient continuity of care over restrictive covenants. Veterinarians (SB 111): Similarly, Utah now restricts the use of non-competes for veterinarians. Such agreements are prohibited unless the veterinarian holds at least a 5% ownership interest in the business. The law reflects a policy judgment that mobility should be the default absent a meaningful ownership stake. Action Items: Employers should review and revise existing restrictive covenant agreements, particularly in the healthcare and veterinary sectors. Template agreements, onboarding materials, and exit procedures should be updated to ensure compliance with the new limitations. Washington Expanded Personnel File Access and Enforcement - Effective May 1, 2026 Washington has finalized amendments to its personnel file regulations through WAC 296-126-050, aligning agency rules with the broader statutory overhaul enacted in 2025. Under the updated framework, employers must provide employees — and certain former employees — with access to a significantly expanded set of personnel records within a defined timeframe. The rule now expressly defines “personnel file” to include not only core payroll and employment records, but also job applications, performance evaluations, disciplinary records (including closed matters), leave and accommodation records, and employment agreements, if maintained. The amendment imposes a 21-calendar-day deadline to provide access following a request and extends coverage to former employees for up to three years post-separation. Importantly, the rule incorporates a private right of action, allowing employees to pursue claims for noncompliance after providing notice. While much of the substantive expansion originates from the 2025 statute, the updated regulation solidifies these obligations and removes prior ambiguity around timing, scope, and enforcement. Action Items: Employers should review and update personnel file policies to reflect the expanded definition and ensure all responsive documents are consistently maintained and retrievable. Internal processes should be implemented to track and respond to requests within the 21-day deadline. Employers should also coordinate with HR and legal teams to identify privileged or sensitive materials before disclosure and assess potential litigation exposure associated with noncompliance.
May 1, 2026
Labor and Employment
Substance Use Policies and Legal Cannabis: Balancing Compliance and Judgment in a Rapidly Shifting Landscape
For years, workplace substance use policies were easy to administer and easy to defend. A positive drug test typically ended the analysis. That is no longer true. Legal cannabis has introduced a level of complexity that many employers have not fully absorbed. The issue is not whether employers can maintain drug-free workplaces. They can. The issue is whether their policies reflect the legal distinctions that matter now and whether their decision-making will hold up under scrutiny. In 2026, the risk is not permissiveness. It is imprecision. The instinct to rely on federal law is understandable, but often misplaced. Cannabis remains illegal under the Controlled Substances Act. For certain employers, particularly those subject to the U.S. Department of Transportation, that fact continues to dictate outcomes. Safety-sensitive roles remain tightly regulated, and state law does not override those obligations. But for most employers, federal law does not answer the questions that actually arise in practice. State law increasingly does. The critical mistake is treating federal illegality as a blanket justification for broad policies or reflexive discipline. In many jurisdictions, that approach is no longer defensible. State law has shifted the analysis in a meaningful way. Across the country, legislatures have moved beyond legalization and into regulation of the employment relationship itself. In practical terms, that means employers are now operating within statutory frameworks that protect lawful, off-duty cannabis use and limit how employers can respond to it. The implications are significant. A positive test result, standing alone, is often no longer enough. Hiring decisions based on off-duty use are increasingly restricted. Policies that fail to distinguish between lawful conduct and workplace impairment are becoming harder to defend. This is not a marginal development. It is a structural change in how substance use issues are evaluated. The legal question is no longer “did the employee use cannabis.” Questioning whether an employee used cannabis is no longer valid. It is whether the employee was impaired at work and whether the employer can prove it. That distinction is where many policies break down. Traditional testing methods detect past use, not current impairment. As a result, employers who continue to rely exclusively on test results are often relying on evidence that does not answer the legally relevant question. State guidance is increasingly explicit on this point. Employers are expected to base decisions on observable, contemporaneous indicators of impairment that affect performance or safety. That requires more than suspicion and more than a laboratory result. It requires judgment, documentation, and consistency. Employers who have not trained managers to identify and articulate those indicators are, in effect, delegating critical legal decisions to individuals who are not equipped to make them. These issues rarely exist in isolation. Substance use questions often intersect with obligations under the Americans with Disabilities Act and parallel state laws. That is where the analysis becomes more nuanced. An employee’s conduct may be unprotected. The underlying condition may not be. Treating those as the same issue is a common and costly mistake. Medical cannabis adds another layer. While federal law does not require accommodation of marijuana use, state law may impose obligations that require a more individualized assessment. Employers who default to categorical rules risk overlooking when the law requires a closer look. This is an area where rigid policies tend to create, rather than reduce, exposure. Remote work has made outdated policies harder to defend. The shift to remote and hybrid work has exposed another weakness in legacy substance use policies. Rules that were drafted with a physical workplace in mind do not always translate well to a workforce that operates across locations and, in many cases, from home. The relevant inquiry is no longer where the employee is. It is whether the employee is fit for duty during working time. That sounds like a subtle distinction. It is not. Policies that focus on presence rather than performance are increasingly out of step with both how work is performed and how the law evaluates these issues. What a defensible approach actually looks like. Employers who are managing this well tend to have one thing in common. Their policies are not just updated. They are deliberate. They distinguish clearly between off-duty conduct and on-duty expectations. They define impairment in terms that can be observed and documented. They use testing in a way that aligns with legal limits rather than as a default response. And they train managers to make decisions that will withstand scrutiny after the fact, not just in the moment. Just as importantly, they recognize when a situation calls for legal analysis rather than a reflexive policy application. The takeaway. This is one of those areas where the law has moved faster than most workplace practices. Employers who continue to rely on familiar approaches are not necessarily being careless. But they are often operating with assumptions that no longer reflect the legal landscape. That is where risk accumulates. A well-drafted policy is part of the solution. It is not the entire solution. Alignment between policy, training, and decision-making is what ultimately determines whether an employer is protected or exposed. In a landscape that continues to evolve, getting that alignment right is not simply a compliance exercise. It is a strategic one.
April 24, 2026
Labor and Employment
How to Use Contractors and Gig Workers Safely: Navigating DOL Classification Standards in a Changing Enforcement Climate
The use of independent contractors and gig workers remains an attractive and, in many industries, essential component of modern workforce strategy. Flexibility, cost control, and scalability continue to drive businesses toward non-employee labor models. At the same time, the legal framework governing worker classification has become more exacting, more nuanced, and more actively enforced. Misclassification is no longer a technical compliance issue. It is a material risk with significant financial and reputational consequences. Understanding how to engage contractors safely requires more than a surface-level application of outdated tests. It requires a disciplined, fact-specific analysis grounded in current U.S. Department of Labor standards and enforcement priorities. The DOL’s Economic Reality Test: Substance Over Form The governing framework under the Fair Labor Standards Act is the economic reality test, as refined by recent Department of Labor rulemaking. The inquiry is not determined by contractual labels or the parties’ stated intentions. It turns on whether, as a matter of economic reality, the worker is dependent on the business or is operating an independent enterprise. While the analysis remains holistic, several core factors consistently guide the determination. The degree of control exercised by the company is often central. Where a business dictates how, when, and where work is performed, classification as an independent contractor becomes increasingly difficult to sustain. Equally significant is the worker’s opportunity for profit or loss based on managerial skill. Independent contractors typically can increase earnings through initiative, investment, or business judgment. Workers paid on a fixed or standardized basis, without meaningful entrepreneurial discretion, present heightened risk. The permanence of the relationship also carries weight. Open-ended or indefinite engagements resemble traditional employment relationships, particularly where the worker is integrated into ongoing operations. Investment in tools and resources, the degree of skill required, and whether the work is integral to the business’s core function all further inform the analysis. No single factor is dispositive. However, in practice, patterns emerge. Where multiple factors point toward economic dependence, the likelihood of misclassification findings increases substantially. Why Misclassification Risk Is Rising Recent enforcement trends reflect a clear and consistent priority. Federal and state agencies are increasingly aligned in scrutinizing contractor arrangements, and plaintiffs’ counsel continue to leverage classification issues as a gateway to broader wage-and-hour claims. Misclassification rarely exists in isolation. It often gives rise to allegations involving unpaid overtime, minimum wage violations, failure to provide benefits, and tax exposure. In collective or class contexts, liability can scale rapidly. In addition, state law frameworks, including ABC-style tests in certain jurisdictions, impose stricter standards than federal law. A classification that may be defensible under federal guidance can nonetheless fail under applicable state requirements. This layered regulatory environment requires a coordinated approach. A one-size-fits-all model is no longer viable for employers operating across multiple jurisdictions. Common Missteps That Create Exposure A recurring issue in contractor engagements is the reliance on form over function. Well-drafted independent contractor agreements, standing alone, do not establish compliance. Agencies and courts consistently look beyond contractual language to the realities of the working relationship. Similarly, classification decisions driven by business preference rather than legal analysis create significant exposure. The fact that a contractor model is operationally convenient, or industry common does not insulate it from challenge. Another frequent concern arises where contractors are treated, in practice, like employees. Requiring adherence to internal policies designed for employees, imposing rigid schedules, or integrating contractors into core teams without distinction undermines the independence necessary to support proper classification. Finally, the use of long-term, exclusive contractor relationships presents elevated risk, particularly where the individual does not meaningfully market services to other clients. Practical Strategies for Structuring Compliant Relationships Mitigating classification risk requires alignment between documentation and day-to-day operations. Engagements should be structured to reflect genuine independence. This includes defining project-based scopes of work, preserving contractor discretion in how services are performed, and avoiding unnecessary control over scheduling or methods. Compensation models should, where appropriate, allow for variation based on performance, efficiency, or business judgment, rather than mirroring employee wage structures. Businesses should also evaluate whether contractors are making meaningful investments in their own operations, including tools, equipment, or business infrastructure. Regular audits are essential. Classification determinations made at the outset of a relationship may become outdated as the engagement evolves. Periodic review allows employers to identify and address risks before they mature into liabilities. Importantly, compliance strategies must account for both federal and state standards. Where stricter state tests apply, those frameworks should govern the analysis. The Strategic Imperative The continued expansion of the gig economy ensures that contractor relationships will remain a focal point of regulatory and litigation activity. Employers who approach classification as a static, check-the-box exercise are increasingly vulnerable. Those who treat it as an ongoing, strategic consideration are better positioned to manage risk effectively. The distinction between an employee and an independent contractor is, at its core, a legal conclusion drawn from operational realities. Aligning those realities with governing standards requires careful planning and informed judgment. For organizations seeking to preserve flexibility while minimizing exposure, experienced counsel is not simply beneficial; it is essential. Proactive structuring, informed by current enforcement priorities, remains the most reliable way to avoid costly disputes and to ensure that workforce models withstand scrutiny when it matters most.
April 10, 2026
Labor and Employment
From Allegations to Adjudication! Court Strips Lively–Baldoni Case to a Retaliation Reckoning
The April 2, 2026, decision in the dispute between Blake Lively and Justin Baldoni is best understood as a post discovery narrowing that leaves the case both smaller and more legally coherent. Judge Lewis Liman granted the defendants’ motion for judgment on the pleadings and motion for summary judgment in substantial part, dismissing most of the claims and allowing only a limited set to proceed. This was not an early-stage plausibility ruling. It was a merits-driven assessment of what the record can actually support. What remains is precise. Lively’s retaliation claim under the California Fair Employment and Housing Act proceeds against the production entities. Her aiding and abetting retaliation claim proceeds against the public relations firm. Her breach of contract claim proceeds against the entity that signed the Contract Rider Agreement. The rest of the case, including Title VII, Labor Code retaliation, and the common law theories, has been dismissed. The contractual analysis is where the opinion does some of its most important work, and it explains why the case looks the way it does now. The court treated two agreements very differently, and the reason is not subtle. One was never signed. One was. The Actor Loanout Agreement failed as a matter of contract formation. The court focused on express language that made execution a condition of any obligation. The agreement provided that the company’s obligations were conditioned on “receipt of executed copies of this Agreement signed by Lender and Artist.” It also required execution of the inducement. Those provisions were not treated as boilerplate. They were treated as dispositive. Lively never signed. The parties continued to negotiate material terms, including the very provision addressing sexual harassment and remedies. On those facts, the court held there was no binding contract to enforce. That conclusion carries broader significance than this case. The court rejected the idea that substantial performance can override an express intent not to be bound absent execution. Filming occurred. Compensation was paid. Negotiations continued. None of that altered the contractual analysis. Where the parties clearly reserve the right not to be bound until signature, courts will enforce that reservation. In practical terms, the court treated the ALA as exactly what it was in the record. An unconsummated negotiation. The Contract Rider Agreement, by contrast, is the rare piece of paper in this record that does exactly what lawyers expect a contract to do. It was signed. It contains operative language. And that language goes directly to the theory that survived. Paragraph 10 provides that there shall be “no retaliation of any kind” against Lively for raising concerns, including retaliation “during publicity and promotional work.” That provision is not abstract. It is tailored to the very conduct Lively alleges occurred after she raised complaints. The court’s willingness to let the contract claim proceed flows directly from that text. The difference in treatment between the ALA and the CRA is therefore not a matter of judicial preference. It is a straightforward application of contract law. An unsigned agreement with disputed terms does not bind. A signed agreement with a clear anti-retaliation clause does. The retaliation analysis follows a similar pattern of doctrinal precision. Several claims failed because they required an employment relationship that the court concluded was not present. That determination eliminated the Title VII and Labor Code theories. But FEHA retaliation is written differently. It protects any person who engages in protected activity. That statutory distinction is what allows the claim to proceed. The court also declined to treat the alleged conduct as too remote from California to support a FEHA claim. It found a sufficient connection based on allegations that California-based actors directed and executed the challenged conduct. That holding keeps California law in play and preserves a framework that is often broader than its federal counterpart. The most closely watched aspect of the case, the alleged reputational campaign, survives but only in the narrow sense that matters at this stage. The court did not find that retaliation occurred. It held that a reasonable jury could find it occurred. It also held that the defendants’ explanation that they were protecting their reputations and the film does not resolve the issue as a matter of law. Competing explanations are for a jury where the record supports them. That brings us to the question that tends to get lost in the headlines. What about Baldoni himself. Is he out? The answer is no, but his exposure is materially reduced. Many of the claims asserted directly against him, including harassment and certain statutory claims, have been dismissed. However, he remains a defendant to the extent he is part of the group alleged to have engaged in retaliatory conduct and conspiracy. The case against him now lives or dies on the retaliation theory rather than on the broader set of claims originally pleaded. The same narrowing applies across the board. Wayfarer is no longer in the contract case because it was not a party to the agreements and the argument was not preserved. But it remains in on retaliation. The public relations entity remains in on aiding and abetting. The film specific entity remains in on both retaliation and contract. The cast of defendants is still present. The script they are operating under is simply much tighter. What the court has done is not to decide who is right. It has decided what can be decided later. The case now turns on a set of familiar but demanding questions. Whether Lively engaged in protected activity. Whether she experienced adverse action after doing so. Whether that action was motivated by retaliation. And whether it breached a written promise prohibiting retaliation. For a legal audience, the lesson is as straightforward as the holding. Contracts matter in the form they are actually executed, not the form in which they are discussed. Statutes matter in the words they actually use, not the words we assume they contain. And at summary judgment, claims survive not because they are compelling in the abstract, but because the record permits a reasonable jury to accept them. The case that remains is narrower. It is also more dangerous in a familiar way. Retaliation claims tend to turn on motive and sequence rather than a single discrete act. Those are questions that courts are often reluctant to resolve as a matter of law. That is why, even after a ruling that eliminates most of the complaint, this litigation is far from over.
April 3, 2026
Labor and Employment
Spring Cleaning Your Employee Files
Spring inspires a certain kind of ambition. Closets are reorganized. Garages are reclaimed. Kitchen drawers finally surrender their mysterious collections of takeout menus and expired soy sauce packets. Employers would do well to apply the same seasonal energy to another space that tends to accumulate clutter quietly over time: employee records. Personnel files have a remarkable way of expanding without supervision. A performance note here, an email printed there, a manager’s handwritten reminder tucked into a folder for “later.” Years later, the file resembles less of a clean employment record and more of a historical archive. Unfortunately, when a dispute arises, those archives tend to become exhibits. Spring is a useful moment for employers to step back and examine how employee records are organized, what should be retained, and what should not be living in the same file in the first place. A thoughtful approach to data retention is not just good housekeeping, it is a meaningful risk management strategy. One of the most common misconceptions about employee files is that everything related to an employee should live in one folder. Legally speaking, that approach creates more problems than it solves. Most employers should maintain several distinct categories of employee records, each with its own purpose and level of confidentiality. The traditional personnel file is the record most employers think of first. It typically contains materials related to hiring, compensation, performance evaluations, promotions, disciplinary actions, and other employment decisions. In short, it tells the professional story of the employee’s relationship with the company. But certain types of information should not live in that same file. Medical information is a prime example. Documents related to medical conditions, disability accommodations, and medical certifications for leave must be maintained separately and treated as confidential under federal law, including the Americans with Disabilities Act. Keeping medical records apart from the general personnel file helps limit access and ensures managers reviewing performance information are not inadvertently exposed to protected medical details. Immigration related documents are another category that deserve their own home. Form I-9s, which verify employment eligibility, should be stored in a separate I-9 file or electronic system rather than within the personnel file itself. There is a practical legal reason for this. If the Department of Homeland Security or another agency conducts an I-9 audit, employers are required to produce those forms. Housing them separately allows employers to provide the required documents quickly without turning over the entire personnel file or exposing unrelated, potentially sensitive employment records. A similar logic applies to background check documentation. Reports obtained under the Fair Credit Reporting Act often contain personal information that should be maintained separately from routine personnel materials and handled in accordance with the statute’s confidentiality requirements. If this sounds like a lot of folders, it is. But the structure matters. Separating records by category is not about bureaucracy. It is about protecting sensitive information, limiting unnecessary disclosure, and ensuring compliance with multiple overlapping employment laws. Consistency is equally important. Employers should aim for uniform recordkeeping practices across the workforce. Documents that are routinely created, such as performance evaluations or written warnings, should appear consistently in employee files. Sporadic documentation invites uncomfortable questions later about whether records were selectively created or preserved. This becomes especially relevant in litigation. When employee files contain scattered notes, informal comments, or partial documentation, they often raise more questions than they answer. The absence of records can be just as problematic. If an employer asserts that an employee struggled with performance but the file contains no documentation of those concerns, that gap becomes difficult to explain. Of course, spring cleaning does not mean shredding everything in sight. Employers must comply with a bevy of federal and state record retention requirements. Under the Fair Labor Standards Act, for example, payroll records must generally be retained for at least three years. The Equal Employment Opportunity Commission requires employers to preserve personnel and employment records for at least one year, and longer if a charge of discrimination has been filed. Form I-9s must be retained for a specific period tied to the employee’s date of hire and separation. Benefit plan records, tax documents, and workplace injury reports often carry their own retention timelines as well. Because the rules vary, the most effective approach is to adopt a written document retention policy that clearly identifies which records must be maintained and for how long. A well-designed policy helps HR teams manage records consistently and prevents the ad hoc cleanups that tend to occur when file cabinets become too full. Those spontaneous cleanups can create real problems. Once an employer becomes aware of a dispute, investigation, or potential claim, the organization has a legal obligation to preserve relevant records. Destroying documents after that point, even if it would normally be permitted under a retention policy, can lead to allegations of evidence destruction. Courts tend to take a dim view of that kind of spring cleaning. Modern technology has also complicated the recordkeeping landscape. Employee information now lives in HR platforms, email systems, messaging tools, shared drives, and occasionally personal devices. A comprehensive retention strategy should account for both physical and electronic records and ensure they are governed by consistent rules. At the same time, employers should resist the temptation to keep everything forever. Over retention can create its own problems. The more documents an organization keeps, the more it may have to search, review, and produce in the event of litigation or an investigation. In other words, the goal is not hoarding. It is curation. Spring cleaning employee files may not provide the immediate satisfaction of finally conquering the garage, but it offers something arguably more valuable: clarity. Organized, compliant records help employers make better decisions, respond confidently to audits or claims, and protect the confidentiality of sensitive information. And unlike that kitchen drawer full of soy sauce packets, an orderly recordkeeping system rarely produces unpleasant surprises later.
April 1, 2026
Landlord Representation
After the Layoff: Rebuilding Trust and Avoiding Legal Landmines
A reduction in force is one of the hardest decisions any organization makes. Even when the business case is clear, the human impact is not. Jobs are lost. Teams are disrupted. And the employees who remain are left trying to process a complicated mix of relief, anxiety, and uncertainty. For employers, the work does not end when the layoff notices go out, or the separation agreements are signed. In many ways, the real challenge begins the next morning when the remaining workforce logs in and asks the same quiet question: what happens now? From a labor and employment perspective, the post-layoff period is where culture, communication, and legal risk collide. Organizations that handle this moment thoughtfully can rebuild trust and stabilize their teams. Those that do not may find themselves facing declining morale, increased turnover, and avoidable legal exposure. The employees who remain are often referred to as “survivors,” and that description is not far off. Survivor’s guilt is common. Employees may feel uneasy about colleagues who lost their jobs while they remained. At the same time, many are wondering if they will be next. The instinct for some leaders is to move on quickly and return to business as usual. That approach rarely works. Silence invites speculation, and speculation almost always fills the gap with worst-case assumptions. The first step toward rebuilding trust is clarity. Employees do not expect leadership to promise that layoffs will never happen again. They do expect honesty about why the reduction occurred and what the path forward looks like. When leaders explain the business realities behind difficult decisions, employees are more likely to view the process as legitimate, even if they wish it had not happened. Transparency also means explaining how decisions were made. Without sharing confidential information, employers should communicate the factors used to evaluate roles and determine which positions were eliminated. When employees understand the reasoning, they are less likely to assume the process was arbitrary or unfair. Managers play a critical role in this moment. Frontline supervisors are usually the first people employees turn to with questions and concerns, yet they are often the least prepared for those conversations. Employers should provide managers guidance on how to address the layoff, answer common questions, and recognize signs of burnout or disengagement on their teams. At the same time, organizations need to take a realistic look at workload. One of the most common mistakes after a reduction in force is assuming the remaining employees can simply absorb the work of those who left. In the short term, teams often step up heroically. Over time, however, sustained overload leads to frustration, mistakes, and eventually departures. Rebuilding trust means acknowledging this reality and adjusting priorities where necessary. Recognition matters as well. Employees want to know their contributions are seen and valued, especially during periods of uncertainty. Celebrating small wins, inviting employee input, and acknowledging extra effort can go a long way toward restoring a sense of stability. But rebuilding morale is only part of the equation. The period following a reduction in force also comes with a number of legal landmines that employers should not ignore. One of the biggest risks is inconsistent messaging. If leaders offer different explanations about why the layoff occurred or how decisions were made, employees may begin to question whether the stated business reasons were genuine. Confusion and mixed signals can quickly fuel discrimination or retaliation claims. Employers should make sure leadership, HR, and managers are aligned on what will be communicated and how. Another key issue is whether the layoff had a disproportionate impact on certain employee groups. Even when a reduction is driven by legitimate business needs, the selection criteria can sometimes result in unintended disparities affecting protected groups. Conducting an adverse impact analysis before implementing a reduction is a critical step that many employers overlook. Age-related issues deserve particular attention. When employees aged 40 and older are asked to sign releases in exchange for severance, employers must comply with the Older Workers Benefit Protection Act. That means using clear language and providing the appropriate review and revocation periods. In group termination situations, employers must also provide specific disclosures regarding job titles and ages of individuals selected and not selected for the program. These requirements are technical, and cutting corners can undermine the enforceability of the agreement. Retaliation is another common flashpoint. Employees who previously raised concerns about discrimination, harassment, pay practices, or workplace safety may claim they were selected for the layoff because they spoke up. That does not mean they cannot be included in a legitimate reduction in force, but it does mean the employer should have well-documented, objective business reasons for the decision. Employers should also be mindful of wage-and-hour issues that may arise after layoffs. When teams shrink, but expectations stay the same, remaining employees may start working off the clock, skipping breaks, or accumulating overtime that managers quietly hope will go unreported. That dynamic can quickly lead to wage claims. Reviewing timekeeping practices and reminding managers of their responsibilities can prevent small issues from becoming larger ones. Severance agreements themselves can also create problems if they are drafted too aggressively. Overly broad confidentiality or nondisparagement provisions may run afoul of employee rights to discuss workplace conditions or participate in protected activity. The goal should be a thoughtful, compliant agreement, not language that attempts to silence employees entirely. Another surprisingly common mistake occurs when leaders try to reassure employees by making promises they cannot guarantee. Statements like “this was a one-time event” or “there will be no more layoffs” may calm nerves in the moment, but they can create credibility problems if circumstances change. Honest, measured communication is always safer than absolute assurances. Finally, employers should remember that documentation matters. Casual comments in emails or internal messages can look very different when reviewed months later by a government agency or a court. Descriptions of employees lacking “energy,” not fitting the “new culture,” or being “close to retirement” may seem harmless in conversation, but can quickly become problematic in litigation. The bottom line is that a reduction in force is not just an operational decision, it is a defining moment for an organization’s culture and leadership. Employers that communicate clearly, train managers thoughtfully, and review decisions through both a business and compliance lens are far better positioned to move forward. Just as important, they signal to the employees who remain that they are valued partners in the company’s future. And in the aftermath of a layoff, that message matters more than ever.
March 12, 2026
Labor and Employment
Severance Packages: Best Practices for Calculating and Communicating Them
Severance decisions sit at the intersection of legal risk, employee relations, and business judgment. For employers, the challenge is not simply deciding whether to offer severance, but determining how much to offer, under what circumstances, and how to communicate it without creating unnecessary exposure. From the employer-side counsel perspective, severance works best when it is approached deliberately—not reactively—and when it aligns with both the reason for separation and the employer’s broader workforce strategy. Understanding the Legal Starting Point Despite common assumptions, severance is rarely required by law. Outside of contractual obligations, collective bargaining agreements, or statutory notice requirements tied to layoffs, most severance arrangements are discretionary. Problems arise when past practice, offer letters, or outdated policies blur that line and create an expectation of entitlement where none was intended. Before discussing numbers, employers should confirm what obligations already exist and whether prior decisions have set informal benchmarks. Consistency matters, but so does clarity about when severance is offered as a business decision rather than a legal requirement. Let the Reason for Separation Drive the Analysis Not all separations should be treated the same, and severance decisions should reflect that reality. A position eliminated due to restructuring presents a very different risk profile than a termination for poor performance or misconduct. Offering severance in situations that contradict the stated reason for termination can undercut the employer’s position if the separation is later challenged. Employer-side counsel often advises against rigid formulas in favor of a framework that considers why the employment relationship is ending, how the decision was documented, and what claims the employee could realistically assert. Severance should reinforce the employer’s narrative—not weaken it. Calculating Severance With Defensibility in Mind While there is no universal formula, employers benefit from anchoring severance decisions to objective factors such as length of service, seniority, and compensation level. These guideposts help ensure internal equity and reduce the risk that severance decisions appear arbitrary or discriminatory. At the same time, employers should preserve discretion. High-risk separations may justify enhanced severance in exchange for a comprehensive release, while low-risk exits may not. The goal is not mathematical precision but defensibility if the decision is later scrutinized. Severance as a Risk-Management Tool From a legal standpoint, severance is most valuable when it is tied to meaningful protections. Employers are not simply paying for goodwill; they are often seeking certainty. A properly structured separation agreement can significantly reduce exposure by resolving potential claims before they become disputes. That tradeoff only works if the consideration offered is proportionate to the risk being addressed. Underpaying for broad releases or overpaying in low-risk situations can create problems. Thoughtful calibration is key. The Importance of Clear, Careful Communication Even well-designed severance packages can create risk if they are communicated poorly. Separation conversations are emotional, and off-the-cuff remarks can later take on outsized significance. Employers should communicate severance in a way that is respectful, measured, and precise, avoiding language that suggests fault, guarantees, or precedent. Employees should understand that severance is being offered in exchange for an agreement, and they should be given adequate time to review. A rushed or confusing process often invites second-guessing—and, in some cases, litigation. Avoiding Unintended Precedent One of the most common employer concerns is that severance decisions will set a precedent for future separations. While consistency is important, employers are not required to treat every departure identically. What matters is whether each decision can be explained based on legitimate business considerations. Maintaining internal documentation of the rationale behind severance decisions—particularly when they deviate from past practice—can be invaluable if those decisions are later challenged. Revisiting Severance Practices Over Time Severance practices should evolve alongside the business. Workforce changes, economic conditions, and developments in employment law can all affect how severance is viewed and valued. Employers who periodically review their policies, templates, and decision-making frameworks are far better positioned than those who rely on habits formed years earlier. Severance is not just an end-of-employment expense. When handled thoughtfully, it is a strategic tool that helps employers manage risk, preserve credibility, and bring closure to difficult transitions.
February 18, 2026
Labor and Employment
Pinged After Dark: Email Expectations, Burnout, and Employment Law Risk
One of the most common questions labor and employment attorneys hear from employers in the post-remote workplace is whether employees can be expected to answer emails outside standard business hours. The question seems straightforward, but it sits at the intersection of wage and hour law, workplace culture, and an evolving understanding of employee burnout. The rise of remote and hybrid work has permanently blurred the line between work time and personal time. What was once an occasional after-hours message has, for many employees, become a steady stream of evening and weekend communications. While constant connectivity can support flexibility and responsiveness, it also creates legal and operational risks when expectations are unclear or unmanaged. From a legal perspective, after-hours email expectations matter most under wage and hour laws. For non-exempt employees, time spent reading and responding to emails outside of scheduled work hours may be compensable under the Fair Labor Standards Act and similar state laws. Even brief, sporadic email activity can add up over time, creating exposure for unpaid wages or overtime if that time is not properly tracked and paid. Employers often underestimate how easily “just checking email” can become a compliance problem. For exempt employees, the analysis is different but not risk-free. While these employees are not entitled to overtime pay, constant after-hours availability can contribute to burnout, stress-related health issues, and requests for medical leave or workplace accommodations. Employers increasingly face claims tied to mental health conditions, and a culture that implicitly demands round-the-clock responsiveness can become evidence in those disputes. Oftentimes there is a disconnect between written policies and actual practice. Many employers maintain policies stating that after-hours work is not required, yet managers routinely send late-night emails or praise employees who respond immediately. Over time, this behavior creates an unwritten expectation that employees reasonably feel they must meet. In legal disputes, it is often those informal expectations — not the handbook language — that carry the most weight. Although U.S. law has not formally adopted a “right to disconnect,” global trends and employee expectations are moving in that direction. Several jurisdictions outside the United States already limit after-hours communications, and similar ideas are gaining traction domestically. Employers should assume that after-hours availability will continue to be scrutinized from regulators, courts, and employees alike. The most effective approach is clarity. Employers benefit from clearly defining when employees are expected to be available and when they are not, and from ensuring that managers understand how their communication habits affect both compliance and morale. Where business needs require after-hours responsiveness, those expectations should be deliberate, consistent, and aligned with compensation practices. Burnout is no longer just a workforce morale issue. It is a business and legal risk that can lead to turnover, leave-related disputes, and costly claims. Employers that proactively set reasonable boundaries around email use and availability are better positioned to retain talent, reduce risk, and defend their practices if challenged. After-hours email is not simply a question of convenience or courtesy. It reflects how well an organization understands its legal obligations and how seriously it takes the sustainability of its workforce. Thoughtful boundaries today can prevent significant problems tomorrow.
February 4, 2026
Labor and Employment
New Year, New Employment Laws; What Employers Must Know for 2026
As 2026 begins, employers across the United States face a wave of significant labor and employment law changes that demand immediate attention. From California’s updates to minimum wage, exempt salary thresholds, and equal pay requirements, to Illinois’ expanded workplace transparency and AI-related compliance obligations, these developments reflect a growing emphasis on employee protections, pay equity, and technology governance. Pennsylvania and Texas also introduced targeted reforms, including anti-discrimination measures, paid leave adjustments, and new standards for responsible AI use. The following provides an overview of the changes effective in early 2026 and outlines practical steps employers should take to help ensure compliance and mitigate risk. Jump to: California | Delaware | New York | Illinois | Pennsylvania | Texas California Minimum Wage Increases to $16.90 Per Hour Several cities and counties have their own required minimum wages. Employers should check their local city and county ordinances where they have employees to ensure they are paying the correct minimum wage. Forty (40) California cities and counties have minimum wage rates that are higher than the state minimum wage of $16.90. Twenty-eight (28) of those forty local cities and counties have increases to their minimum wage beginning January 1, 2026, with West Hollywood, at $20.25 per hour, being the highest. What Employers should do: Employers should check the minimum wages for any city or county where they have employees. Make sure hourly rates are updated to comply with state law and the City/County where the employee is working. Employers must pay minimum wage in the city or county where the employee works and not where the employer is located. The Salary Requirement for Exempt Employees Rises to $70,304 In order to be exempt, an employee must meet the duties test and the salary test. The California salary test requires exempt employees to earn twice the minimum wage. With the increase in minimum wage to $16.90 on January 1, 2026, the new minimum salary for California exempt employees is $70,304. What Employers should do: Make sure any California employee who is exempt has an annual salary of at least $70,304. Requirement to Allow Employees to Use Sick Leave for Jury Duty and When Appearing as a Witness Use of sick leave was expanded to allow employees to use sick leave for jury duty or when they are required to appear in court to comply with a subpoena or other court order. What Employers should do: Employers should revise their sick leave policy in their Employee Handbook and make sure that the new 2026 posters are displayed. In the alternative, employers can provide employees with the Notice linked to this Article. The revised and required notice is linked below. Poster English Spanish New Notice Requirement – California Workplace – Know Your Rights Effective February 1, 2026, and each year thereafter, employers must provide notice of employees’ rights. The Labor Commissioner has developed notices that are linked here in Spanish and English. Employers are required to keep records of each written notice provided or sent for three years, including the date provided or sent. Employers may, but are not currently required to, provide a link or show the video developed by the Labor Commissioner’s office. In addition, by March 30, 2026, employers must provide employees the opportunity to name an emergency contact and indicate whether that contact should be notified if the employee is arrested or detained. What Employers should do: Employers should distribute the Notice to employees and keep records of how and when it was distributed. In addition, employers should calendar distribution for each year and give employees the opportunity name an emergency contact if they are arrested or detained. Changes to the California Equal Pay Act The definition of “pay scale” under the California Equal Pay Act has been broadened, and the statute of limitations for claims thereunder has been increased from two (2) to three (3) years, with employees able to get relief for up to six (6) years. The definition of “pay scale” is revised to include a good-faith estimate of the salary or hourly wage range the employer reasonably expects to pay for the position upon hire. “Wages” and “wage rates” are also redefined to include all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. What employers should do: Employers should ensure that they review their pay scales and document how they determined the pay scale to show that the pay scales were based on a good-faith estimate. Employment Contracts Cannot Require Employees to Pay Employers for Training (if they leave their employment) For employment contracts entered into on or after January 1, 2026, it is unlawful to include or to require an employee to execute as a condition of employment or a work relationship a contract that includes a contract term that does any of the following: Requires the worker to pay an employer, training provider, or debt collector for a debt if the worker’s employment or work relationship with a specific employer terminates. Authorizes the employer, training provider, or debt collector to resume or initiate collection of or end forbearance on a debt if the worker’s employment or work relationship with a specific employer terminates. Imposes any penalty, fee, or cost on a worker if the worker’s employment or work relationship with a specific employer terminates. This means employers cannot require employees to reimburse them for any training provided to them if they leave their employment. If this new law is violated, employees are entitled to actual damages sustained by the worker or five thousand dollars ($5,000), whichever is greater, in addition to injunctive relief, and reasonable attorney’s fees and costs. There are certain exceptions as follows: A contract entered into under any loan repayment assistance program or loan forgiveness program provided by a federal, state, or local governmental agency. A contract related to the repayment of the cost of tuition for a transferable credential that meets certain requirements. A contract related to enrollment in an apprenticeship program approved by the Division of Apprenticeship Standards. A contract for the receipt of a discretionary or unearned monetary payment, including a financial bonus, at the outset of employment that is not tied to specific job performance, provided certain conditions are met. A contract related to the lease, financing, or purchase of residential property. What employers should do: Make sure new contracts do not have provisions requiring repayment upon an employee’s termination unless they fit within one of the exceptions above. Personnel Files Must Include Education and Training Records Labor Code 1198.5 is revised to require an employer who maintains education or training records in those records in the employee’s personnel file which include the following: The name of the employee. The name of the training provider. The duration and date of the training. The core competencies of a training, including skills in equipment or software. The resulting certification or qualification. What employers should do: If employers have training or education records for employees, ensure they are placed in the employee’s personnel file. In addition, employers should ensure that electronic personnel files include all documents and are properly maintained. Revisions to California’s Baby WARN Act In addition to the prior notice requirements, employers are now required to give notice of whether the employer plans to coordinate services, such as a rapid response orientation, through the local workforce development board, the employer plans to coordinate services through a different entity, or the employer does not plan to coordinate services with any entity. In addition, employers are required to include in the notice a description of the statewide food assistance program known as CalFresh. Regardless of whether the employer chooses to coordinate services with the local workforce development board or another entity, the employer shall include in the notice a functioning email and telephone number of the board and the following description of the rapid response activities offered by the local workforce development board, and specifically: “Local Workforce Development Boards and their partners help laid off workers find new jobs. Visit an America’s Job Center of California location near you. You can get help with your resume, practice interviewing, search for jobs, and more. You can also learn about training programs to help start a new career.” If the employer chooses to coordinate services with the local workforce development board or another entity, the employer shall arrange services within 30 days from the date of the notice. What employers should do: If employers have layoffs that trigger California’s WARN Act, they should ensure they provide the information above in the notices sent to employees. Failure to give proper notice would subject an employer to a violation of WARN because the penalties are significant. California’s Transparency in Frontier AI Act California’s Transparency in Frontier Artificial Intelligence Act (TFAIA) is the first U.S. law specifically regulating frontier level AI systems. The law takes effect January 1, 2026, for covered developers. TFAIA creates the first U.S. regulatory framework specifically targeting developers of advanced, high-capacity AI models. While the law is aimed at AI developers, employers and their Human Resources representatives play a critical role because the Act requires organizational transparency, risk reporting, and safety processes for AI development and deployment. What employers must do: Ensure employees understand new responsibilities, documentation expectations, and escalation pathways and employers should review their AI practices. Determine Whether the Company Is a “Covered Developer” - Employers must determine whether the organization develops “foundation models” or “frontier models” as defined in the Act. - An employer is considered a “frontier developer” if you train or initiate training of a “frontier model,” which is defined as a model that is: (1) trained on a broad set of data, (2) designed for generality of output, and (3) can be adapted to a wide range of distinctive tasks. - A “large frontier developer” is a frontier developer whose entity (and its affiliates) had annual gross revenues exceeding US $500 million in the preceding calendar year. Large frontier developers are subject to additional obligations under the Act. Implementation of Mandatory Training Programs - Employers should develop training programs on compliance obligations, seek to define roles and responsibilities for safety reporting, and implement whistleblower protections aligned with the Act’s transparency goals. Training should cover the required documentation and transparency practices, how to identify and escalate safety concerns, and the ethical use of AI. Critical Safety Incident Reporting - A frontier developer must report “critical safety incidents.” The statute requires the company to establish a mechanism for submission by a frontier developer or member of the public. Internal Reporting & Whistleblower Channels - The Act emphasizes risk disclosure and public accountability for advanced AI systems. Employers must ensure employees know how to report safety issues or misuse, protect employees who raise concerns, and maintain documentation of reports and follow-up actions. Whistleblower Protections - Employees (“covered employees”) who assess, manage, or address frontier model risk are protected when they disclose: - a specific and substantial danger to public health or safety from a catastrophic risk - a violation of the chapter. Large frontier developers must: - Provide an anonymous internal reporting process for such disclosures. - Provide monthly updates to the whistleblower on the status of disclosure. If retaliation occurs, the burden shifts to the employer to show clear and convincing evidence that they would have taken the same action absent the disclosure. Practical Steps: - Update whistleblower policies to cover frontier AI risk disclosures. - Set up anonymous reporting channels (internal or third-party) - Train human resources, legal, and safety teams in handling such disclosures in line with the Act. Monitor Regulatory Updates & Enforcement Trends - Because SB 53 is the first law of its kind, enforcement of the Act will be unpredictable. Employers must regularly track guidance from California regulators, monitor similar legislation in other states, and prepare for potential federal alignment or preemption. California’s Transportation Network Company Drivers Labor Relations Act California’s Transportation Network Company Drivers Labor Relations Act establishes a new labor relations framework for app-based rideshare and delivery drivers. Although drivers remain classified as independent contractors under Proposition 22, the Act creates collective representation or “union” rights, minimum labor standards, and new Human Resources compliance obligations for Transportation Network Companies (“TNC”). Note that this Act does not apply to drivers who are employees. The Act allows workers to form, join, and participate in the activities of driver organizations, to bargain through representatives of their own choosing, and to engage in concerted activities for the purposes of bargaining or other mutual aid protection. To participate, drivers must meet a "20 rides in six months" threshold to ensure a more established connection to the industry. Despite the new rights allowed to gig drivers, they continue to be classified as independent contractors under California law. What employers need to know: Drivers Have New Rights to Representation - The Act allows drivers to form or join Driver Representative Organizations (DROs), which can collectively advocate for drivers, participate in sector-wide “meet and confer” processes, and raise concerns about pay, safety, and working conditions. TNCs must treat these rights similarly to traditional labor relations protections. Anti-Retaliation Rules Apply - TNCs may not retaliate against drivers for joining or supporting a DRO, participating in collective discussions, or raising safety or working condition concerns. Further, the Act emphasizes certain unfair employer practices, including but not limited to failure to provide requested information, interfering with the organization or activities of, discouraging membership, blacklisting, coercing, or otherwise inappropriately engaging with certified driver bargaining organizations. TNCs must ensure that driver deactivation decisions are well documented, performance-related actions are consistent and non-discriminatory, and that no adverse employment action appears in the New Notice and Posting Requirements TNCs must ensure that drivers receive: Written notice of their rights under the Act, information about DROs, and instructions for filing complaints or participating in representation processes. These notices must be accessible in the driver app and be provided in the driver’s primary language. Within two weeks after the end of each calendar quarter, commencing with the quarter ending on March 31, 2026, each covered TNC shall submit the following items to the board: Driver’s name, driver’s license number, and, to the extent known by a TNC, the most recent email address, local residence and mailing addresses, cellular telephone number; and The TNC driver’s first date joining the platform and the number of rides the TNC driver completed in the previous six months, for each TNC driver who has completed at least 20 rides within the State of California within the prior six months to any “union” related protected activity. Further Implications TNCs must be careful to recognize potential protected activity and avoid statements that could be interpreted as discouraging representation. They must also take steps to handle drivers’ complaints neutrally and consistently. Given the nature of the new law and its structure, encouraging interaction between drivers and TNCs, TNCs can reasonably anticipate a sharp increase in driver inquiries, including inquiries about pay transparency and working conditions, and increased scrutiny of deactivation decisions. Drivers will also likely initiate requests for meetings or mediation, creating significantly more work for involved human resource professionals. A consistent, documented process will be essential to ensure compliance. New Ordinance in Los Angeles Effective December 1, 2025, Los Angeles hotel employers with 60 or more guest rooms must provide public housekeeping training of at least six hours on topics including: Hotel worker rights and employer responsibilities. Best practices for identifying and responding to suspected human trafficking, domestic violence, or violent or threatening conduct. Best practices for effective cleaning techniques to prevent the spread of disease. Best practices for identifying and avoiding insect or vermin infestations. Best practices for identifying and responding to the presence of other potential criminal activity. What employers should do: Employers in the City of Los Angeles who have a hotel with 60 or more rooms need to provide the above training to employees. The training must be provided by a certified trainer and the employer, must be 5 ½ hours in length and the employer must pay for the training. Delaware 2025 HS 1 for HB 55: An Act to Amend the Delaware Code Relating to Prohibited Discrimination on the Basis of Military Status Signed by the Governor 7/23/25 (effective immediately) – Adds “military status” as a basis for discrimination to state public accommodation, housing, insurance, education, and employment law. 19 Del. C. Ch. 37: Family and Medical Leave Insurance Program 12/1/25 - Paid Family and Medical Leave Act contributions to the program commence for employers with 10 or more employees. 2026 19 Del. C. Ch. 37: Family and Medical Leave Insurance Program 1/1/26 – Paid Family and Medical Leave Act became effective; employees may begin taking leave under the statute. 2027 HS 2 for HB 105: An Act to Amend Title 19 of the Delaware Code Relating to Employment Practices Signed by the Governor 9/26/25 (effective 9/26/27) – Creates 19 Del. C. 709C, Pay Transparency Act, mandating that employers disclose hourly/salary compensation range plus benefits description to all applicants for employment. Notable Pending Legislation SB 63 w/ SA 1: An Act to Amend Title 19 of the Delaware Code Relating to Labor Expands workplace fraud liability to all upstream prime and general contractors (and construction managers) for workplace fraud (misclassification of employees as independent contractors) violations by downstream contractors, regardless of privity of contract. Passed by Delaware House and Senate, vetoed by the Governor 8/28/25. Future status is uncertain. SB 197: An Act to Amend Title 14 And Title 29 Of the Delaware Code Relating to Project Labor Agreements for School Public Works Contracts Introduced 6/26/25 – Imposes union-only project labor agreements on all public and charter school construction. Likely illegal as pre-empted by NLRA. Future status is uncertain. 19 DE Admin. Code 1322: Proposed Amendments to Delaware Prevailing Wage Regulations Changes proposed but not promulgated due to considerable objections, various changes exceeding statutory authority, and numerous errors and omissions. Future status is uncertain. New York New York City Earned Safe and Sick Time Act, Amendments (Int. 780 A) Effective February 22, 2026, New York City amended the New York City Earned Safe and Sick Time Act (“ESSTA”) to require private employers of any size to provide all employees with 32 hours of frontloaded, unpaid safe and sick time that is available for use immediately upon hire and each calendar year thereafter. These hours are in addition to existing paid safe and sick time hours required under ESSTA. The amendment expands covered uses of leave to include caregiving needs by an employee “caregiver” for a minor child or defined “care recipient,” workplace violence-related needs for the employee or employee-caregiver for a family member, public disasters (e.g., workplace closures, shelter in place orders, school/childcare restrictions), and benefits and housing proceedings. Although no waiting period is permitted to be imposed, employers may set a minimum increment of up to four hours per workday and need not carry over unused unpaid hours. Employers are required to track paid and unpaid leave balances (e.g., on pay statements or other written documentation for each pay period). New York State Paid Prenatal Personal Leave, NYLL § 196-b(4-a) Effective January 1, 2025, New York requires that any private sector employee, regardless of employer size, working in the state be afforded at least 20 hours of paid prenatal personal leave in any 52-week period as part of the New York State Paid Sick Leave Law. This leave obligation, which amends NYLL § 196-b to add section 4-a, is separate from and in addition to the hours of safe and sick leave already required under NYLL § 196-b. Leave under NYLL § 196-b(4-a) may be used only by the pregnant employee for prenatal healthcare services such as medical appointments, exams, procedures, testing, monitoring, and fertility treatment. Employers cannot require employees to exhaust other accrued safe and sick leave first, and the 52-week period begins the first time the employee uses prenatal leave. If an employee separates from the employer, the employer has no obligation to pay the employee for unused paid prenatal leave hours. Notably, guidance issued by the New York Department of Labor states that spouses, partners, or other support persons are not eligible to use paid prenatal leave to attend prenatal appointments with a pregnant person. Employers should update their handbooks or create a standalone policy describing eligibility, covered uses, procedures to request leave, and an anti-retaliation provision. Employers should also update their payroll or paid time off tracking systems to comply with the requirement to separately track a prenatal leave balance. New York State Paid Prenatal Leave/FAQs New York City Paid Prenatal Personal Leave, NYC Admin Code § 7-216 Effective July 2, 2025, New York City amended the New York City Earned Safe and Sick Leave Law to add the same 20-hour paid prenatal leave requirement as added by New York State earlier in the year. The city law contains additional requirements beyond the State’s law, such that employers must provide a written notice on pay stubs detailing hours used and any remaining balance for each pay period, as well as specify that “reasonable” notice for foreseeable leave is at least 7 days and that “as soon as practicable” is the standard for unforeseeable leave. The City law further requires maintaining records of leave use, dates, and amounts for at least three years, and that employers distribute an updated “Notice of Employee Rights” to new and existing employees. New York State Right to Paid Prenatal Leave/FAQs New York City Lactation Accommodation, Local Law 109 (2014 109) Effective May 8, 2025, NYC Local Law 109 of 2024 amends the New York City Human Rights Law (“NYCHRL”), primarily codified in New York City Administrative Code § 8-107(1)(b), to modify the City’s existing lactation room and policy obligations, including that employers must physically and electronically post their lactation accommodation policy and the policy must acknowledge New York State law which provides 30 minutes of paid lactation break time per pumping session. Employees may use paid break or meal time for any additional needed time. NYC Commission on Human Rights Retail Worker Safety Act, NYLL §27-e Effective June 2, 2025, employers with ten or more retail employees must adopt a retail workplace violence prevention policy that is equivalent to the model policy or more protective and train all employees annually. Notice of training must be provided at each annual session. For retailers with 500 or more employees in New York State, silent response and panic buttons, as well as training on their use, are required in covered retail locations starting January 1, 2027. NY Department of Labor/Retail Worker Safety Expanded Mental Injury Coverage, Workers’ Compensation Law § 10(3) Effective January 1, 2025, New York amended the Workers’ Compensation Law § 10(3) to allow any worker to file a claim for a mental injury caused by extraordinary work-related stress. This amendment expands workers’ compensation coverage for mental injuries from extraordinary work-related stress beyond first responders to all workers. As of June 4, 2025, the Workers’ Compensation Board may not disallow a claim simply because the stress was not greater than normal workplace stress where the claim is for PTSD, acute stress disorder, or major depressive disorder premised on extraordinary work-related stress attributable to distinct work-related events and supported by medical evidence under the DSM criteria. The mental health condition can be a standalone claim and does not need to be tied to a physical injury. New York State Medical Treatment Guidelines Reproductive Health Decision-Making, NYLL § 203-e As of January 1, 2025, employers were again required to include a notice of employee rights and remedies under NYLL § 203-e in handbooks or as a standalone policy, as the U.S. Court of Appeals for the Second Circuit vacated the prior injunction, which had eliminated the written notice requirement. There is no model policy available at present. Policies should thus be carefully crafted to note that the employer will not request or seek to access an employee’s personal information regarding the employee’s or the employee’s dependent’s reproductive health decision making, including but not limited to, the decision to use or access a particular drug, device, or medical service, without the employee’s prior informed affirmative written consent. The policy should include decisions to use contraception, fertility treatments, or other reproductive health services as covered reproductive health decision-making. A policy should also note that the employer will not discriminate or retaliate for these choices, and employees’ related medical information disclosed to the employer will remain confidential. https://www.govinfo.gov/content/pkg/USCOURTS-ca2-22-01076/pdf/USCOURTS-ca2-22-01076-0.pdf New York State COVID-19 Quarantine Paid Sick Leave New York’s COVID-19 quarantine/isolation paid sick leave mandate expired July 31, 2025. Employees may rely on the New York State Paid Sick Leave Law and, if applicable, the New York City Earned Safe and Sick Leave Law, for illness, diagnosis, treatment, or care for COVID-19, including COVID-related health conditions. Equal Rights Amendment to N.Y. Const. Art. I § 11 Effective January 1, 2025, the New York State Constitution’s equal protection clause prohibits discrimination based on ethnicity, national origin, age, disability, and sex (including sexual orientation, gender identity, gender expression, pregnancy, pregnancy outcomes, and reproductive healthcare and autonomy). Employers should revise EEO statements to list the new protected classes and consider EEO training refreshers referencing the constitutional amendment. Illinois Illinois has enacted several new laws effective January 1, 2026, impacting employment agreements, workplace practices, and employee rights. Workplace Transparency Act Amendments (HB 3638) These amendments expand protections for employees and contractors, covering all violations of state and federal employment laws, not just discrimination. Employers cannot impose unilateral contract terms that shorten statutes of limitations, apply non-Illinois law, require out-of-state venues, or restrict truthful disclosures or concerted activity. Confidentiality clauses in settlement or termination agreements must include separate consideration and cannot waive future concerted activity. What employers should do: Review and update all agreements, revise confidentiality provisions, and train HR and legal teams on compliance. Human Rights Act Amendments (HB 3773) Employers must not use AI in ways that discriminate based on protected classes or use zip codes as proxies. They must also notify employees when AI is used in employment decisions. What employers should do: Audit AI-driven hiring and decision-making systems, implement clear notification processes, and train HR and IT teams. Nursing Mothers in the Workplace Act Amendments (SB 212) Employers must pay employees for lactation breaks at their regular rate and cannot require the use of paid leave for these breaks. What employers should do: Update break policies, adjust payroll systems, and communicate changes to staff. Blood and Organ Donation Leave Amendments (HB 1616) Part-time employees are now entitled to 10 days of organ donation leave, with pay calculated based on their average daily pay over the last two months. What employers should do: Revise leave policies and ensure payroll accuracy. Victims’ Economic Security and Safety Act Amendments (HB 1278) Employers cannot retaliate against employees who use employer-issued devices to document domestic or gender-based violence. They must grant access to related information on those devices and post notices explaining employee rights. What employers should do: Update device-use policies, ensure proper notice postings, and train managers on retaliation prohibitions. Pennsylvania CROWN Act During this period, the most significant statewide development was the expansion of Pennsylvania’s anti-discrimination framework through amendments to the Commonwealth’s CROWN Act, which became effective on January 24, 2026. These amendments expressly prohibit employment discrimination based on hair texture, protective hairstyles, and certain head coverings and hairstyles historically associated with religious creeds. The statute specifically identifies styles such as locs, braids, twists, coils, Bantu knots, afros, and extensions, making clear that appearance-based policies can no longer be justified where they disproportionately affect racial or religious groups. What employers should do: This change requires a careful reassessment of grooming standards, dress codes, and professionalism policies, as well as supervisor training to ensure that enforcement practices do not give rise to disparate treatment or disparate impact claims under the Pennsylvania Human Relations Act. Workplace Posting Requirements In early January 2026, Pennsylvania employers also became subject to a new workplace posting obligation aimed at increasing awareness of benefits available to veterans and their families. Effective January 3, 2026, employers with more than 50 full-time employees must post a notice prepared by the Pennsylvania Department of Labor and Industry that outlines federal and state veterans’ benefits and services. The required posting includes contact information for the U.S. Department of Veterans Affairs Crisis Line and county directors of veterans affairs. What employers should do: Although this change does not alter substantive employment rights, it adds a compliance obligation that employers must integrate into their standard posting practices, particularly those operating multiple worksites across the Commonwealth. Pittsburgh’s Paid Sick Days Act Amendments to Pittsburgh’s Paid Sick Days Act, effective January 1, 2026, increased the annual caps on paid sick leave accrual while maintaining the existing accrual rate of one hour for every 30 hours worked. Under the amended ordinance, employers with 15 or more employees must now permit employees to accrue and use up to 72 hours of paid sick leave per year, while smaller employers must allow accrual and use of up to 48 hours annually. What employers should do: These changes require Pittsburgh employers to update payroll systems, written leave policies, and employee handbooks. Texas Responsible Artificial Intelligence Governance Act (HB 149) Effective January 1, 2026, Texas’s Responsible Artificial Intelligence Governance Act establishes a comprehensive regulatory framework governing anyone who conducts business in the state or develops or deploys AI systems for use in Texas. The Act adopts a broad, technology-neutral definition of artificial intelligence systems and assigns compliance responsibilities based on whether an entity develops or deploys such systems. More specifically, the Act prohibits the development or deployment of AI intended for social scoring or discriminatory purposes, imposes baseline duties on developers and deployers, and requires governmental entities to notify individuals when they interact with AI. It also preempts local AI regulations, vests exclusive enforcement authority with the Texas Attorney General, and creates both an Artificial Intelligence Council and a first‑in‑the‑nation regulatory sandbox to support supervised testing of AI innovations. What employers should do: Audit AI tools to ensure they are not developed or deployed for any prohibited intent, update internal policies to prohibit harmful or discriminatory AI uses, and train staff on compliance with the new legal standards. Amendments to Non-Compete SB 1318, amending SB 1318, amending Effective September 1, 2025, healthcare practitioner non-compete amendments take effect under SB 1318, amending Tex. Bus. & Com. Code Ann. § 15.50 and adding Tex. Bus. & Com. Code Ann. § 15.501. Under the amendments, non-compete agreements with physicians and other health care practitioners, including dentists, professional and vocational nurses, and physician assistants, must (1) allow the physician to buy out the non-compete for no more than the physician’s annual salary and wages at the time of terminating the contract or employment, (2) not last more than one-year post-termination, (3) be limited geographically to no more than five miles of the physician’s primary practice location, and (4) be clearly and conspicuously stated in writing. The statute further caps non-compete buy-outs at the employee’s salary. The amendments apply only to new or renewed agreements after the effective date. Trey’s Law, SB 835 Effective September 1, 2025, Texas’s Trey’s Law, Senate Bill 835 adding Tex. Civ. Prac. & Rem. Code Ann. §§ 129C.001 and 129C.002, voids and renders unenforceable non-disclosure or confidentiality agreements and provisions prohibiting a person from disclosing an act of sexual abuse or facts related to an act of sexual abuse. The law covers all civil cases for sexual assault, regardless of the victim’s age or when the abuse occurred. The law applies to agreements made before September 1, 2025, but enforcing prior NDAs will now require a court order. Other parts of settlement agreements, like the monetary amount, can remain confidential.
January 26, 2026
Labor and Employment
Inclusive Holidays: Building Trust and Engagement at Work
With Lunar New Year falling on February 17 this year, employers have an opportunity to pause and think more broadly about how religious and cultural holidays are recognized in the workplace. Holiday inclusion is often treated as a year-end issue, but for many employees, meaningful observances occur well outside the traditional Western calendar. Lunar New Year is widely celebrated across East and Southeast Asian cultures and, for many individuals, carries deep cultural, familial, and sometimes religious significance. Employees may travel, participate in religious ceremonies, or spend extended time with family. When these observances are overlooked or misunderstood, employees can feel invisible or undervalued, even in otherwise well-intentioned workplaces. From an employment law perspective, holiday inclusion is not simply a morale issue. Federal and state anti-discrimination laws require employers to reasonably accommodate sincerely held religious beliefs unless doing so would create an undue hardship. While Lunar New Year itself is often cultural rather than religious, requests for time off or schedule flexibility may still implicate accommodation obligations, particularly when tied to religious practice or long-standing traditions. Problems most often arise when holiday-related requests are handled inconsistently. Approving time off for some holidays but questioning others, or celebrating certain traditions while ignoring others, can expose employers to claims of disparate treatment. These risks are heightened when managers are left to make ad hoc decisions without clear guidance. Employers can reduce both legal exposure and employee frustration by focusing on flexibility and neutrality. Policies that allow employees to use floating holidays or personal time for observances that matter to them tend to work better than rigid holiday calendars. Clear communication and manager training are also critical so that requests tied to cultural or religious observance are handled thoughtfully and consistently. Workplace celebrations require similar care. Recognizing Lunar New Year can be positive, but only when done respectfully and without assumptions about who celebrates or how. Employees should never feel pressured to participate, explain their culture, or serve as informal ambassadors simply because of their background. As workforces continue to diversify, inclusive holiday practices increasingly function as both a compliance strategy and a culture building tool. Employees notice when their traditions are acknowledged and when they are ignored. Over time, those signals can affect engagement, retention, and trust. Lunar New Year serves as a useful reminder that inclusion does not require employers to recognize every holiday on the calendar. Instead, it requires systems that allow employees to observe what matters to them without friction or stigma. Thoughtful planning now can help employers support a diverse workforce while staying aligned with legal obligations throughout the year.
January 23, 2026
Labor and Employment
Power, Proof, and Perception in the Blake Lively–Justin Baldoni Litigation
This blog provides an update on the ongoing litigation involving Blake Lively and Justin Baldoni. If the original blog explored how this case began, this chapter is about what it has become. Some lawsuits resolve disputes, and there are lawsuits that reveal systems. The litigation between Blake Lively and Justin Baldoni belongs squarely in the latter category. What began as a conflict arising out of the production of It Ends With Us has become a slow-moving but oddly illuminating seminar on how modern employment law operates when the workplace is glamorous, the parties are famous, and the stakes extend well beyond liability. At a distance, this case is often flattened into a familiar cultural shorthand. Two celebrities. Competing narratives. A public eager to assign heroes and villains before the pleadings have even settled. Up close, however, the litigation is far more interesting and far less cinematic. It is not about grand gestures or dramatic revelations. It is about burden shifting, evidentiary texture, and the unromantic mechanics of proving what the law actually requires rather than what public opinion might prefer. Lively’s claims are rooted in doctrinally orthodox territory. Hostile work environment and retaliation are not exotic causes of action, even in Hollywood. What complicates matters is not the legal framework but the context in which it must be applied. Film sets are workplaces that market intimacy, emotional exposure, and creative vulnerability as professional virtues. That does not exempt them from employment law, but it does make line-drawing more delicate. Conduct that might be clearly inappropriate in a corporate office can appear, at least superficially, normalized when wrapped in the language of art and collaboration. Juries are asked to navigate that ambiguity without losing sight of the legal question, which is not whether the environment was intense or uncomfortable, but whether it crossed a legally cognizable threshold. This is where the case becomes less about personalities and more about proof. Severity and pervasiveness are not abstract concepts. They are constructed through accumulation. Frequency. Context. Reaction. Silence or objection. Response or indifference. The text messages and communications that have emerged through discovery are legally interesting not because they are personal, but because they are contemporaneous. They are the breadcrumbs juries are trained to follow when reconstructing intent and impact long after the moment has passed. Baldoni’s defense strategy reflects a sophisticated understanding of those dynamics. His posture has not been limited to denial. Instead, it has focused on reframing. Recharacterizing interactions as misread. Suggesting that objections were unclear or retrospective. Implicitly arguing that what the plaintiff experienced as coercive or hostile was, in fact, part of a fraught but mutual creative process. This is not an argument that misconduct never occurs. It is an argument that ambiguity exists, and in civil litigation, ambiguity can be a powerful ally. The brief countersuit, though procedurally unsuccessful, fits neatly within that strategy. Its real value was never doctrinal. It was narrative. It signaled resistance rather than retreat and attempted to reposition reputational harm as a two-way street. Courts can dispatch weak claims with relative ease. Jurors, however, carry impressions with them long after motions are denied. Litigation is as much about what lingers as what survives. The retaliation component of the case may ultimately prove more consequential than the underlying harassment claims. Retaliation law is less concerned with tone and more with timing. It asks whether adverse consequences followed protected activity and whether those consequences can be explained without resort to post hoc rationalization. In industries where decisions are informal and documentation is sparse, that inquiry can quickly become uncomfortable. Silence, in these cases, is rarely neutral. Hovering over all of this is the court’s increasingly difficult task of managing relevance in an era of celebrity saturation. Discovery disputes over third-party anonymity and sealing are not merely procedural housekeeping. They reflect a more profound anxiety about what happens when litigation escapes the courtroom and becomes cultural content. The law presumes openness for good reason, but it was not designed for cases where relevance is routinely conflated with notoriety. Judges are left to perform a delicate balancing act while everyone else watches for entertainment. What makes this case compelling is not the promise of a dramatic verdict, but the way it exposes the friction between legal standards and human storytelling. Employment law is intentionally unsentimental. It reduces experience to elements and burdens and asks factfinders to be disciplined in their empathy. Celebrity culture, by contrast, thrives on immediacy, identification, and moral clarity. When the two collide, neither emerges entirely intact. By the time this case reaches a jury, if it does, much will already have been decided in quieter ways. In discovery conferences. In evidentiary rulings. In how jurors are primed to interpret ambiguity. And perhaps in how the industry itself recalibrates its tolerance for informality masquerading as creativity. This lawsuit will not end Hollywood’s reckoning with power or fix the uneasy relationship between art and accountability. The law is not built for that kind of closure. What it can do, and what this case is already doing, is force a conversation about what workplaces owe their employees, even when the workplace happens to come with a red carpet. What is perhaps most striking about this litigation is how little of it turns on dramatic moments and how much of it turns on endurance. Employment cases of this kind rarely win with a single revelation. They win through accumulation. Through patience. Through the unglamorous discipline of discovery, motion practice, and evidentiary framing. In that sense, the Blake Lively and Justin Baldoni case is an unusually pure illustration of how civil law actually functions when stripped of narrative shortcuts. The public tends to assume that credibility is something a party either has or lacks. Courts know better. Credibility is constructed incrementally through consistency, corroboration, and the absence of convenient revision. It is shaped as much by what parties do when no one is watching as by what they say once litigation begins. That is why contemporaneous documentation looms so large here, and why informal industries often find themselves at a disadvantage once formality is imposed retroactively by a lawsuit. Film production culture has long relied on trust, improvisation, and professional intimacy as operating norms. Those norms are not inherently unlawful, but they are legally fragile. They assume good faith, mutual understanding, and aligned incentives. Litigation, by contrast, assumes none of those things. It assumes conflict, misinterpretation, and self-interest. When a dispute moves from the set to the courtroom, the cultural currency of collaboration is abruptly converted into the legal currency of proof. Not all industries make that exchange gracefully. This case also illustrates the quiet but significant role of institutions that never appear in the caption. Insurers, production companies, distributors, and financiers are watching closely, not for moral lessons but for risk signals. They are asking whether existing safeguards are sufficient, whether reporting mechanisms function in practice, and whether informal authority structures create exposure that contracts alone cannot neutralize. These are not abstract questions. They affect underwriting decisions, contractual provisions, and the degree of oversight studios are willing to impose on creative leads who have historically operated with broad discretion. There is, too, a cautionary tale here about the limits of reputational self-help through litigation. Aggressive narrative counteroffensives may satisfy an immediate impulse to respond, but they also lengthen disputes and deepen entanglement. The longer litigation persists, the less control any party has over how they are perceived. The law does not reward eloquence. It rewards coherence. And it is remarkably indifferent to whether a party feels misunderstood. For lawyers, this case is a reminder that celebrity does not simplify litigation. It complicates it. Famous clients are scrutinized differently by jurors, judges, and adversaries alike. Their communications are read with suspicion. Their motives are interrogated. Their silence is rarely interpreted as restraint. Representing them requires not just technical competence but also strategic restraint and a tolerance for ambiguity, which can be difficult to maintain under public pressure. For workplaces, particularly creative ones, the lesson is not that informality must disappear, but that it must be bounded. Clarity, documentation, and meaningful response mechanisms are not bureaucratic intrusions. They are legal insulation. They protect not only employees but also leadership by ensuring that disputes are addressed early, internally, and with a record that reflects intent rather than reconstruction. And for observers tempted to treat this case as entertainment, it offers a quieter but more durable insight. The law is not a referendum on character. It is a method for resolving disputes under conditions of uncertainty. It does not promise catharsis. It promises a process. When we mistake one for the other, we misunderstand both. As this case continues its methodical progress toward trial, it will likely generate more headlines, more commentary, and more attempts to distill it into a morality play. That impulse is understandable. It is also misleading. The real work of this litigation is happening in places that do not trend. In conference rooms. In discovery disputes. In evidentiary rulings that shape what a jury will ultimately be allowed to hear. That is where outcomes are decided. Quietly. Incrementally. Without a soundtrack. Again, while the original blog examined the origins of this case, this chapter focuses on how the matter has evolved and what it has now become. Not a scandal, but a study. Not a spectacle, but a process. And for anyone interested in how the law actually mediates power, creativity, and accountability, it is a study worth paying attention to.
January 16, 2026
Labor and Employment
The Post-Holiday Reset: Re-Establishing Communication and Availability Norms
The weeks following the holidays often bring a familiar feeling: full inboxes, overlapping priorities, and a sudden return to urgency after a brief pause. During the holiday season, many teams naturally loosen expectations around response times and availability. The challenge in January is not simply returning to work, but resetting clear and healthy norms before old habits (or unhealthy ones) take hold again. In today’s hybrid and remote work environments, boundaries around communication are rarely self-correcting. Without intentional reset moments, employees may assume they are expected to remain as available as they were during peak periods, even when that level of responsiveness is no longer necessary or sustainable. The post-holiday return provides a rare opportunity to recalibrate. One of the most common sources of confusion is silence. When organizations do not explicitly restate expectations, employees are left to infer them based on behavior. A single late-night email or weekend message can unintentionally signal that immediate responses are once again required. Over time, these small signals shape norms that are difficult to unwind. Re-establishing healthy expectations starts with clarity. Teams benefit from shared understanding around what constitutes urgent communication versus what can wait. Not every message needs an instant reply, yet modern tools make everything feel immediate. Resetting norms means reinforcing that responsiveness should be purposeful, not constant. Manager behavior plays an outsized role in this process. Employees tend to mirror what they see, not what they are told. If leaders resume sending messages at all hours or praising rapid responses, boundaries quickly erode. Conversely, when leaders model reasonable response times and respect off-hours, those practices spread organically across teams. It is also important to acknowledge that flexibility cuts both ways. Many employees value the autonomy to step away during the day or adjust schedules as needed. That flexibility works best when paired with mutual respect for personal time. Resetting expectations is not about reducing productivity; it is about ensuring that availability aligns with actual business needs rather than habit or inertia. January is also an ideal time to address roles that genuinely require extended availability. Rather than allowing informal expectations to creep back in, organizations should be intentional about when and why off-hours communication is necessary. Clear parameters reduce frustration and help employees understand when responsiveness truly matters. Healthy communication norms do more than protect work-life balance. They improve focus, reduce burnout, and enhance collaboration. When employees are not operating in a constant state of interruption, the quality of work and decision-making improves. As teams settle back into routine after the holidays, the question is not how quickly everyone can return to being “always on.” The better question is: which norms will support sustainable performance throughout the year? A thoughtful reset now can prevent misunderstandings, protect morale, and set a tone that lasts well beyond the first quarter.
January 7, 2026
Labor and Employment
Holiday Parties Without Headaches: Handling Complaints with Care
The annual holiday party is meant to lift spirits, reward employees, and create a sense of connection as the year draws to a close. It is often one of the few opportunities for your team to relax together outside the workplace. Yet the same relaxed atmosphere can also lead to missteps. When an employee later reports harassment arising from the event, an employer suddenly faces a complex combination of legal obligations, workplace culture concerns, and employee relations challenges. I regularly help organizations navigate these situations. How you respond in the hours and days after receiving a report matters greatly. With the right approach, you can address the issue responsibly, protect all parties involved, and strengthen trust within your workforce. Responding When an Employee Comes Forward When an employee reports harassment related to a company event, the first and most important step is to acknowledge the complaint and ensure the employee feels heard. Even though the behavior occurred outside the office, the legal analysis does not change when the event is employer-sponsored or reasonably connected to work. Your obligations under federal, state, and local anti-harassment laws still apply. Begin by gathering the essential facts: what occurred, who was involved, where the incident took place, and whether any witnesses or relevant communications exist. Holiday events often generate photographs, videos, or social-media posts that may become significant pieces of evidence. Preserve anything that may be relevant as early as possible. Once you have the initial information, move promptly to an impartial investigation. A trained internal investigator or outside counsel can do this. The key is neutrality: no one involved in the investigation should have a personal connection to the individuals involved, and the process should follow the same procedures you would use for any other workplace complaint. While the investigation is ongoing, consider whether temporary steps are necessary to prevent retaliation or further interaction between the individuals involved. These measures need not imply wrongdoing; they are simply safeguards while the facts are being gathered. At the conclusion of the investigation, determine whether your policies were violated and identify appropriate corrective actions. Communicate the findings to the individuals involved in a way that preserves confidentiality while assuring them that the matter was taken seriously. Finally, check in with the reporting employee afterward to ensure that no subtle form of retaliation has occurred, whether through scheduling changes, exclusion from meetings, or other shifts in workplace dynamics. Why Holiday Parties Create Unique Risks Although holiday gatherings feel informal and festive, the legal standards governing workplace conduct do not disappear at the door of the venue. When the employer organizes, sponsors, or encourages attendance at an event, it is generally considered an extension of the workplace. Alcohol service, dimmer social boundaries, and a sense of celebration can cloud judgment and create opportunities for conduct that someone later perceives as inappropriate, unwelcome, or intimidating. Employers also sometimes assume that what happens after official party hours is beyond their responsibility. But if employees continue the celebration in a way that directly follows the company event, the conduct may still be viewed as connected to the workplace. Understanding this continuum is essential when assessing what occurred and how to address it. A consistent theme in my work with clients is that risk increases when boundaries are unclear: unlimited drinks, a lack of visible leadership presence, or an atmosphere that drifts too far from the professional culture you maintain during the workday. When employees are unsure where the lines are, the potential for misunderstanding increases. Creating a Celebration That Reflects Your Values Most employers do not want to cancel holiday events, and they shouldn’t. With thoughtful planning, these gatherings can remain enjoyable while aligning with your legal obligations and your organizational culture. The most effective preparation begins before the party. Communicate expectations clearly but respectfully. A simple reminder that all workplace policies still apply, including those on harassment, professionalism, and retaliation, sets the tone without dampening spirits. Consider the format of the event and whether the venue, timing, and availability of alcohol reflects the environment you want to create. Provide non-alcoholic options, ensure food is available, and, if alcohol is served, rely on trained bartenders rather than self-serve. Managers play a crucial role. A brief refresher on their responsibilities can make a substantial difference. They set the tone and often serve as the first point of contact if an issue arises. Their visible, engaged presence communicates that the organization values both celebration and safety. After the event, a short message thanking employees for attending and reminding them that any concerns can be reported without fear of retaliation further reinforces your culture of respect. When a Report Occurs: The Guiding Principles If you receive a complaint related to the party, approach it with the same care you would apply to any workplace concern. Ask whether the event was employer-sponsored, what evidence may exist, how quickly the complaint was made, and whether any safety or interim measures are needed. Consistency and fairness are essential. So is prompt action. Delays can undermine credibility and may create legal exposure. When handled well, the response to a complaint not only addresses the immediate issue but also strengthens the organization’s culture. Employees notice when leadership acts thoughtfully and with integrity. That trust is valuable long after the holiday season ends. A well-planned holiday party can bring your team together in meaningful ways. With clear expectations, attentive leadership, and a willingness to act quickly when concerns arise, employers can enjoy the benefits of these celebrations without creating unnecessary risk.
December 17, 2025
Labor and Employment
Employee Handbooks: Essential Guide or Outdated Relic?
For years, employee handbooks were treated as routine onboarding documents, i.e., something handed out on a new hire’s first day and rarely revisited unless a legal issue arose. But in 2026, the pace of workplace change has rendered the “static handbook” approach obsolete. With hybrid work now firmly embedded across industries and compliance obligations multiplying at a rapid rate, the modern employee handbook has become one of the most critical tools an employer can maintain. Whether an organization views it as a cultural roadmap or a liability shield, the reality is that a well-maintained handbook is no longer optional. One of the biggest drivers behind this shift is the transformation of how and where employees work. Traditional handbooks were built around the assumption of a centralized, physical workplace. Today’s workforce operates across multiple states and time zones, and home offices, often using company systems in spaces the employer cannot control. Without clearly defined expectations (how time should be recorded, what equipment must be secured, how quickly employees should respond, and what “professionalism” looks like through a webcam), employers unintentionally create inconsistencies that can later breed miscommunication or even litigation. The hybrid model has also introduced new questions around expense reimbursement, data security, and workplace safety, all of which require written guidance to manage effectively. Legal compliance is another area where employers face mounting pressures. The last several years have brought sweeping changes in employment law at every level. From expanding privacy laws governing employee data, to new protections for caregiver status and reproductive decision-making, to the resurgence of federal scrutiny over non-competes and independent contractor classification, the regulatory landscape is complex and evolving. A handbook that has not been meaningfully updated within the last one or two years is almost certainly missing something critical, and often something required by law. Even policies that feel evergreen, such as anti-harassment or leave provisions, may be outdated if they do not reflect newer protected categories or recent state-level paid leave mandates. What many employers do not realize is that the handbook is also one of the most important documents in a dispute. Courts and agencies regularly review handbook policies to determine whether employers communicated expectations clearly and applied them consistently. When a policy is vague or outdated, employees and managers may interpret it differently, leading to discrimination claims, retaliation allegations, and wage-and-hour challenges. A modern, accurate handbook not only provides clarity to employees — it becomes a critical defense exhibit when disputes arise. The content of today’s handbooks looks very different from that of just a few years ago. Remote and hybrid work policies now need to be specific and actionable, addressing topics such as performance expectations outside the office, the use of AI-based tools, and the handling of confidential information in remote environments. Anti-harassment standards must acknowledge that misconduct can occur in virtual settings just as easily as in physical workplaces, and reporting procedures must be accessible to employees who may rarely visit a company office. Likewise, timekeeping rules must squarely address off-the-clock work and break compliance in a distributed workforce, where supervisors cannot easily observe employee activity. Technology and data privacy have also become essential components of the handbook. With the growing use of monitoring software, AI-assisted performance evaluation, and increased reliance on personal devices, employees expect transparency around what data is collected and how technology will be used. Many states now require employers to provide written disclosures regarding privacy practices. A handbook that avoids these topics leaves both employees and the organization vulnerable to confusion and legal risk. One notable shift in recent years is the move away from static paper or PDF manuals. The most effective organizations now treat their handbooks as living compliance resources: digitally housed, easily searchable, and updated regularly. Electronic acknowledgments have replaced signature pages, and some employers are even incorporating short explainer videos or interactive elements to help employees better understand complex policies. In this environment, a handbook is no longer a document that sits untouched for years; it is a dynamic framework that evolves alongside the organization and its legal obligations. The process of modernizing a handbook does not stop with rewriting policies. Employers must ensure that the document accurately reflects actual workplace practices. Courts scrutinize discrepancies between written policies and managerial behavior, and inconsistencies can undermine an employer’s defense. Training supervisors on the content of the handbook, especially policies related to leave, performance management, and remote work expectations, is just as important as updating the text itself. Multi-state employers must also account for the varying state and local laws that apply differently across their workforce, often through state-specific addenda. In many ways, the increase in complexity has reaffirmed the purpose of the employee handbook. Rather than becoming outdated, the handbook has become essential for navigating the uncertainties of the modern workplace. It provides structure in an era of evolving norms, clarity in a landscape of regulatory change, and consistency across a workforce that may never gather under one roof. Employers who update their handbooks regularly (and, ideally annually, and more often if operating in multiple states) position themselves to stay ahead of compliance risks and maintain a more informed, engaged workforce. The bottom line is simple: if your organization has not reviewed its handbook in the last 12 to 18 months, 2026 is the year to do it. A thoughtful, modernized handbook supports your culture, protects your business, and ensures that employees understand what is expected of them (no matter where they work).
December 4, 2025
Labor and Employment
OSHA Reopens After Government Shutdown: What Employers Should Expect
The Occupational Safety and Health Administration (OSHA) is officially back to full operations, now that the government shutdown has ended. With staff fully restored, employers need to recognize that agency activity previously paused is now resuming — and, in many cases, accelerating. As OSHA re-engages inspections, rulemaking, and policy initiatives, organizations that assumed a “wait-and-see” stance during the shutdown may find themselves playing catch-up. During the funding lapse, OSHA’s enforcement was largely limited to imminent danger situations, workplace fatalities and catastrophes, and high-gravity serious violations that could not wait. Programmed inspections, outreach, cooperative-program activity, and some informal conferences were suspended. Yet despite that pause, employers did not gain any regulatory holiday: many deadlines continued to run. For example, the six-month statute of limitations for OSHA to issue citations remained in force, as did the 15-working-day deadline for filing a Notice of Contest once a citation is issued. Because of that, businesses must now review and respond to any enforcement activity that may have been initiated during the shutdown period but did not proceed in a typical manner. With the shutdown behind us, OSHA will begin clearing the backlog of work that accumulated, and that means employers should expect increased activity. Complaints filed during the shutdown may lead to inspections, email inquiries, or phone contact, and cited cases may be pushed toward litigation or settlement as the agency’s Office of the Solicitor resubmits matters to the Occupational Safety and Health Review Commission (OSHRC). The new leadership at OSHA and OSHRC, confirmed during or immediately following the shutdown, signals a renewed policy push: new priorities, new enforcement emphasis, and perhaps fresh interpretations of the rules. On the regulatory side, rulemaking initiatives that were paused are now reactivated. For example, OSHA recently closed its post-hearing comment period for a proposed heat exposure standard, and staff will resume review of comments now that appropriations have returned. Other dockets — related to chemical respiratory protection, changes to the general duty clause, lighting in construction, and workplace violence/infectious disease standards — are also moving forward. Employers should remain alert because while final rules may not be imminent, the path is now open. Given this environment, it is imperative for employers to revisit their safety, health, and compliance programs—and do so with urgency. While the shutdown may have created a temporary lull, it did not suspend employer obligations. During the pause, many firms may have held off on site audits, deferred training programs, delayed record-keeping cleanup, or postponed internal corrective actions. Now is the time to address those gaps. Reporting requirements remain in effect: for example, employers must report work-related fatalities within eight hours and serious injuries (such as amputations, loss of an eye, hospitalization) within 24 hours of occurrence. Furthermore, even in states under federal OSHA plan coverage, the same rules apply: while federal inspectors may have been limited, many state-plan jurisdictions continued inspections and enforcement. Another significant factor: backlog and delay do not mean indefinite delay. When inspections resume in earnest, the accumulation of complaints and deferred cases may result in a surge of agency activity, meaning firms that assumed “no one is watching during the shutdown” could find themselves under scrutiny. In other words, the quiet period is essentially over. Employers should confirm that abatement deadlines, informal conference windows, and contest deadlines have not expired during the shutdown. If citations were issued, the 15-working‐day contest deadline is jurisdictional: missing it means losing the right to challenge the citation. Even if informal conferences were unavailable during the shutdown, the contest deadline continued to run. That means many firms may need to act even before the agency shows up. Documentation of abatement actions, corrective steps, and safety program updates will be vital. In terms of regulatory posture and leadership, the era ahead may bring changed enforcement priorities. With a new assistant secretary for OSHA and a newly confirmed solicitor of labor now in place, OSHA will likely clarify its strategic focus and resume formal rulemaking. Employers should anticipate possible shifts in emphasis — for instance in the areas of musculoskeletal disorders, infectious disease in healthcare, workplace violence protections, and emerging hazard exposures. The agency’s restart also triggers renewed activity at the Mine Safety and Health Administration (MSHA) and its review commission. For employers in mining and heavy industry, that means you should not assume continued dormancy. For practical steps, employers should immediately conduct a legal-compliance health check. Review outstanding citations, confirm whether any deadlines have run or are about to run, track complaints filed with OSHA during the shutdown, and review your injury/illness reporting and record-keeping for accuracy. Update or re-launch training and internal auditing efforts that may have been deferred. Check the status of rulemaking efforts that may affect your industry (for example, the heat stress standard) and monitor whether state-plan jurisdictions are adopting or adapting state-specific rules in response. If your firm operates in multiple states, especially with state-plan OSHA programs, coordinate your multi-state compliance posture now because state enforcement may not have had the same suspension. Finally, ensure your safety culture remains robust: a period of reduced government oversight is not grounds to reduce employer vigilance. In short, OSHA’s return means business as usual — and then some. Employers who treat the shutdown as a pause rather than a break may find themselves at a disadvantage. Now is the time to engage proactively, refresh your compliance strategy, reinforce your safety programs, document your actions, and stay alert.
November 20, 2025
Labor and Employment
Independent Contractor Misclassification: Labels Don’t Shield Liability, Says Eleventh Circuit
In a decision that underscores the importance of substance over form in employment relationships, the Eleventh Circuit recently reaffirmed that contractual labels alone do not determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The case, Galarza v. One Call Claims, LLC, involved three insurance adjusters who sued for unpaid overtime, alleging they were misclassified as independent contractors. The plaintiffs had signed independent contractor agreements with One Call Claims, LLC (OCC), which staffed adjusters for Texas Windstorm Insurance Association (TWIA). Despite the agreements, the adjusters worked full-time for TWIA for nearly two years, were restricted from working for other carriers, and had no control over their pay or hours. TWIA dictated how they performed their work—even after transitioning them to remote roles. The Eleventh Circuit applied the six-factor economic reality test from Scantland v. Jeffrey Knight, Inc., emphasizing that no single factor is dispositive. Instead, the focus is on the worker’s economic dependence on the company. The court found that five of the six factors weighed in favor of employee status, reversing the trial court’s summary judgment and sending the case to a jury. Key takeaways from the decision include: Control Matters: The companies’ significant control over the adjusters’ work and schedules undermined their classification as independent contractors. Economic Dependence Is Central: The court stressed that the ability to deduct expenses or maintain licenses does not negate economic dependence. Indefinite Engagements Raise Red Flags: The long-term, exclusive nature of the relationship suggested an employment arrangement. Essential Services Tip the Scale: The adjusters’ work was integral to the companies’ operations, further supporting employee status. The court’s conclusion was striking: “If a jury could not reasonably find that the workers were economically dependent under these facts, it’s not clear that a professional working from home could ever establish economic dependence under the FLSA.” What Employers Should Do This case serves as a cautionary tale for employers. Simply labeling a worker as an independent contractor does not insulate a company from liability. Employers must evaluate the actual working relationship using the economic reality test. Misclassification can lead to substantial legal exposure, including back pay, penalties, and litigation costs. Employment counsel should guide clients in conducting regular audits of contractor relationships, ensuring that classifications align with the realities of the work performed. When in doubt, err on the side of caution — and compliance.
November 3, 2025
Labor and Employment
EEOC Regains Quorum and Signals Major Policy Shifts Ahead
On October 7, 2025, the United States Senate confirmed President Trump’s nomination of Brittany Panuccio as the third commissioner of the Equal Employment Opportunity Commission (EEOC). Her confirmation restores the commission’s quorum for the first time since early 2025 and gives the agency the power to issue, amend, or rescind regulations and guidance, and to take formal policy action under all major civil rights statutes. Since January, Acting Chair Andrea Lucas has led the EEOC without a quorum, which prevented the agency from adopting or revising rules and limited its ability to pursue systemic litigation or other actions requiring a majority vote. With Commissioner Panuccio joining Lucas and Commissioner Kalpana Kotagal, the EEOC now holds a two-to-one Republican majority. The agency is positioned to act quickly in reshaping key regulations and enforcement priorities consistent with the administration’s civil rights enforcement agenda. Acting Chair Lucas has stated that the EEOC will focus on restoring “evenhanded enforcement of employment civil rights laws for all Americans.” She has identified several priorities, including addressing what she describes as race- and sex-based discrimination linked to diversity, equity, and inclusion initiatives, expanding protections for religious liberty, reinforcing sex-based rights rooted in biological distinctions, and increasing enforcement in areas involving national origin and religious discrimination. The Pregnant Workers Fairness Act Will Likely Be the First Target The Pregnant Workers Fairness Act (PWFA) Final Rule, issued in 2024 under a Democratic majority, is expected to be the first regulatory area the commission revisits. Lucas has long expressed concern that the Final Rule improperly expands the phrase “pregnancy, childbirth, or related medical conditions” to include conditions such as menstruation, infertility, abortion, and menopause. She has argued that these conditions are tied to female biology and not to a specific pregnancy or childbirth, and therefore fall outside the statute’s scope. When the Final Rule was approved in April 2024, Lucas voted against it and issued a statement explaining her opposition. She stated that the regulation “fundamentally errs in conflating pregnancy and childbirth accommodation with accommodation of the female sex.” She also warned that the rule’s structure makes it difficult to sever the portions she viewed as unlawful from those she considered reasonable. In May 2025, the U.S. District Court for the Western District of Louisiana agreed in part, vacating the section of the Final Rule that interpreted the PWFA as requiring accommodations for elective abortions. The court ordered the EEOC to revise the rule, but the agency was unable to do so without a quorum. Now that a quorum has been restored, the EEOC is well-positioned to issue a revised version that reflects both the court’s order and Lucas’s interpretation of the statute. Until the revised rule is published, the current PWFA Final Rule remains in effect except for the vacated abortion provision. Employers should therefore continue to comply with existing requirements while preparing for potential revisions that may narrow the definition of “related medical conditions” and reduce the range of circumstances requiring accommodation. Anticipated Shifts in Other Enforcement Priorities The EEOC is expected to move quickly in several additional areas. The first is diversity, equity, and inclusion initiatives. The agency has already emphasized that Title VII does not recognize any “diversity” or “equity” justification for making employment decisions based on protected characteristics. Employers should expect additional technical assistance and enforcement activity aimed at programs that take race, sex, or other protected traits into account in hiring, promotion, compensation, or participation in mentorship and employee resource programs. The second is religious accommodation. Following the Supreme Court’s decision in Groff v. DeJoy, which heightened the standard employers must meet to show that a religious accommodation would create an undue hardship, the EEOC is expected to take an expansive approach favoring employees. Lucas has a long record of supporting religious liberty initiatives and is likely to prioritize this area in future enforcement actions. The third involves LGBTQ protections. The EEOC may reconsider its interpretation of Bostock v. Clayton County and revisit its 2024 harassment guidance, which included examples related to pronoun usage and access to facilities consistent with gender identity. The agency has already removed certain gender identity resources from its website, suggesting that further revisions are imminent. Finally, the restoration of a quorum means that the EEOC can again authorize systemic or “pattern or practice” litigation and file amicus briefs in significant appellate cases. While reports indicate that the commission has deprioritized cases based on disparate impact theory, employers should remember that private plaintiffs and state enforcement agencies can still pursue such claims under Title VII and related laws. What Employers Should Do Now Employers should continue to comply with the current PWFA Final Rule, but monitor developments closely as the EEOC prepares revisions. They should review their diversity and inclusion programs to confirm that participation criteria and selection practices are neutral and compliant with Title VII. Religious accommodation policies should be updated to reflect the stricter standard established in Groff v. DeJoy, and harassment and equal opportunity training materials should be reviewed for consistency with potential upcoming changes to EEOC guidance. The restoration of a quorum marks a turning point for the EEOC. With full authority restored and a clear policy direction under Acting Chair Lucas, the agency is likely to move swiftly to revise the PWFA regulations, issue new guidance on DEI and religious rights, and revisit prior positions on gender identity and sexual orientation. Employers should expect significant regulatory activity in the coming months and prepare to adapt their workplace policies and practices accordingly.
October 15, 2025
Labor and Employment
New York City Expands Minimum Pay Protections to Grocery Delivery Workers
On September 10, 2025, the New York City Council voted to override Mayor Eric Adams’ vetoes and enacted legislation extending workplace protections and minimum pay standards to grocery delivery workers. With this development, app-based couriers delivering groceries through third-party platforms, such as Shipt or Instacart, will now be entitled to the same $21.44 per hour minimum pay rate that has been in effect for restaurant delivery workers since April 2025. Background: How We Got Here New York City has steadily built out a framework for regulating app-based delivery work. In 2021, the city became the first in the nation to pass comprehensive legislation creating wage and workplace protections for restaurant delivery couriers. That law prohibited companies from charging workers fees to access their pay, guaranteed restroom access at restaurants, required companies to provide insulated delivery bags, and mandated greater transparency around pay and tips. It also authorized the Department of Consumer and Worker Protection (DCWP) to study working conditions and establish a minimum pay standard. Following DCWP’s review, the city implemented a pay floor for restaurant couriers in 2023. After scheduled increases, the minimum pay rate reached $21.44 per hour as of April 1, 2025. Until now, however, grocery delivery workers have remained excluded from those protections. The July 2025 Legislation On July 14, 2025, the City Council passed a package of bills aimed at closing that gap. In addition to extending the minimum pay standard to grocery couriers, the bills required delivery apps to build in a 10% tipping option at checkout and mandated that workers be paid within seven days of the close of a pay period. When Mayor Adams did not act within 30 days, most of the bills automatically became law on August 13, 2025. However, Adams vetoed two of the most significant measures, including those that would have extended minimum pay to grocery delivery workers. In his veto message, he expressed concern that higher labor costs would lead to rising grocery prices at a time when many New Yorkers, particularly seniors, families relying on SNAP or EBT, and individuals with disabilities, already face food insecurity. The Council Override The City Council strongly disagreed, emphasizing that grocery couriers face the same risks and exploitation as restaurant couriers and deserve equal treatment. On September 10, 2025, the council voted to override the mayor’s vetoes, enacting the measures in full. While some provisions are tied to the effective dates of related safe-access legislation, the core result is that grocery delivery workers are now covered by the same $21.44 hourly pay standard as restaurant couriers. Reactions and What Comes Next The legislation has sparked vigorous debate. Worker advocates and council sponsors hailed the change as a victory for fairness, pointing out that grocery and restaurant couriers often perform identical tasks under similar conditions. Delivery platforms and some grocers, by contrast, have warned that the laws will significantly raise costs, potentially by as much as 46%, reduce tipping, cut shifts, and increase fees for local grocers. At least one company has already threatened litigation against the city. DCWP will continue monitoring compliance, and enforcement is expected to be strict. For businesses operating in New York City, this means both restaurant and grocery delivery models are now subject to enhanced wage obligations, new in-app tipping requirements, and accelerated payment timelines. Employer Takeaway The expansion of New York City’s delivery worker protections represents another step in the city’s effort to regulate the gig economy. App-based service providers should act quickly to review pay practices, update app functionality, and confirm compliance protocols to avoid penalties or reputational risk. Grocers that rely on third-party platforms should also be prepared for potential increases in delivery costs and related contract renegotiations.
September 29, 2025
Labor and Employment
The Heat Is On: OSHA’s Proposed Heat Safety Rule Advances with June 16 Hearing
Update: OSHA Extends Post-Hearing Comment Deadline On September 17, 2025, OSHA extended the deadline for submitting post-hearing comments on its proposed Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. Chief Administrative Law Judge Steven Henley granted a 30-day extension, moving the deadline to October 30, 2025. As a reminder, OSHA published the proposed rule in the Federal Register on August 30, 2024 and held an informal public hearing from June 16 through July 2, 2025. The agency has received more than 43,000 comments to date. Only stakeholders who filed a Notice of Intent to Appear at the hearing may submit post-hearing comments at this stage. Submissions, including supporting data, must be filed electronically through www.regulations.gov (Docket No. OSHA-2021-0009). What this means for employers: Employers who are eligible to file post-hearing comments should review their earlier submissions and consider whether supplemental comments are warranted before the October 30 deadline. Even if not eligible, employers should continue to monitor this rulemaking closely, as OSHA is moving forward quickly with finalizing the heat standard. Proactive compliance planning — including assessing current heat-illness prevention measures — will help employers stay ahead of regulatory changes. Original article published on June 19, 2025 As summer temperatures soar, so does the urgency for workplace safety measures to protect employees from heat-related illnesses. On July 2, 2024, the Occupational Safety and Health Administration (OSHA) unveiled its proposed rule, “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings,” a groundbreaking step toward establishing the first nationwide standard to combat excessive heat in workplaces. With a public hearing scheduled to begin on June 16, 2025, this proposed rule is poised to reshape how employers across industries manage heat hazards. OSHA will hold the hearing virtually, and it will continue through July 2, 2025. The purpose of the hearing is to gather public input on the proposed rule, which aims to protect workers from hazardous heat exposure. What is the Proposed Rule? OSHA’s proposed standard is a comprehensive framework designed to protect approximately 36 million workers in both indoor and outdoor settings. The rule applies to all employers and activates when the heat index hits 80°F for more than 15 minutes during any 60-minute period — termed the “initial heat trigger.” At 90°F, the “high heat trigger” introduces additional requirements. Here’s a snapshot of what employers would need to do: Written Heat Injury and Illness Prevention Plan (HIIPP): Employers must develop and implement a tailored, written plan to evaluate and control heat hazards. This includes designating a heat safety coordinator to oversee compliance. Temperature Monitoring: Outdoor employers must monitor temperatures frequently to assess heat exposure accurately. Indoor employers need to identify areas where the heat index may reach 80°F and incorporate a monitoring plan into their HIIPP. Mandatory Breaks and Cool-Down Areas: At the initial heat trigger, employers must provide access to drinking water and break areas. At the high heat trigger, mandatory 15-minute breaks every two hours and observation systems (similar to buddy systems) to monitor for heat illness symptoms are required. Training and Acclimatization: Employees must receive training on heat hazards, emergency responses, and acclimatization protocols to gradually build tolerance to higher temperatures, especially for new or returning workers. Hazard Alerts and Signage: Employers must issue heat hazard alerts before shifts or when high heat is recognized, using accessible communication methods that are easily understood by all employees. For indoor areas frequently exceeding 120°F, warning signs are mandatory. This isn’t just a suggestion—it’s a specification standard, meaning employers have little wiggle room to deviate from OSHA’s requirements. The rule’s scope is vast, covering general industry, construction, maritime, and agriculture; however exemptions apply to work with no reasonable expectation of reaching the initial heat trigger or areas consistently air-conditioned below 80°F. Why This Rule Is a Big Deal OSHA’s push for a federal heat standard has been simmering since 2021, fueled by President Biden’s Executive Order 13990 on climate change. The agency’s National Emphasis Program on heat hazards, launched in April 2022, underscored the need for action, though citations under the General Duty Clause have been sparse and often overturned in litigation. This proposed rule aims to close those gaps, providing clear, enforceable requirements to protect workers from heat-related illnesses, which can range from heat exhaustion to life-threatening heatstroke. The timing is critical. Rising temperatures are no longer just a summer concern—record-breaking heat waves are hitting year-round, especially in regions like the Southwest. States like California, Minnesota, Oregon, and Washington already have heat illness prevention standards, and California’s recent indoor heat rule (effective July 23, 2024) shares similarities with OSHA’s proposal. For employers with existing plans, the good news is that OSHA’s rule doesn’t mandate changes if your program already includes the proposed elements. However, aligning your plan with OSHA’s requirements could be a smart move to avoid General Duty Clause violations. The Public Hearing: Your Chance to Shape the Future The public hearing begins on June 16, 2025 (and continues through July 2, 2025), offering a platform for employers, industry groups, and workers to weigh in. Only those individuals who filed a timely Notice of Intention to Appear (NOITA) will be allowed to testify or ask questions at the hearing. The comment period, which closed on December 30, 2024, saw robust engagement, and this hearing is the next step in refining the rule. Recent Supreme Court decisions, such as Loper Bright Enterprises v. Raimondo, have raised questions about the authority of federal agencies, potentially impacting OSHA’s rulemaking. Additionally, the Trump administration’s “Regulatory Freeze Pending Review,” issued on January 20, 2025, could delay or alter the rule’s trajectory, though its impact on ongoing rulemaking remains unclear. The hearing will be a critical moment to gauge the rule’s momentum and OSHA’s response to these dynamics. Practical Tips for Employers While the rule is still in the proposal stage, proactive employers can get ahead of the curve. Here’s how: Review Existing Plans: If you have a heat illness prevention program, compare it to OSHA’s proposed elements. Gaps in training, monitoring, or break policies could expose you to future citations. Engage in the Hearing: Attend the hearing (even if you failed to submit a timely NOITA) to stay informed and, if able, to voice practical concerns, especially if your industry faces unique challenges (e.g., indoor heat in manufacturing or outdoor work in construction). Train Your Team: Start training supervisors and employees on heat hazards and acclimatization now. Early adoption can reduce risks and demonstrate compliance readiness. Monitor State Standards: If you operate in states with existing heat rules, ensure compliance while preparing for potential federal alignment. California’s indoor rule, for example, has trigger points at 82°F and 87°F, slightly different from OSHA’s. The Heat Is On—Are You Ready? OSHA’s proposed heat injury and illness prevention standard is a wake-up call for employers to prioritize worker safety in a warming world. With the public hearing kicking off on June 16, 2025, now is the time to engage, prepare, and adapt. Whether you’re a small business or a multinational corporation, this rule could redefine your workplace safety obligations.
September 25, 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
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
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
