Key Highlights The U.S. Supreme Court unanimously held that the FAA’s transportation worker exemption may cover last-mile delivery drivers who deliver goods that originated out of state. The exemption can apply even when the driver’s own route is entirely intrastate. The ruling may narrow the enforceability of arbitration agreements for employers in logistics, delivery, retail and e-commerce operations. It is likely to increase challenges by workers tied to interstate supply chains. Employers should review arbitration agreements covering drivers, couriers and delivery personnel in light of the Court’s continuous-movement analysis. They should also assess whether affected worker groups may require alternative dispute resolution provisions under state law. In Flowers Foods, Inc. v. Brock, the United States Supreme Court issued a significant decision that will impact employers who utilize arbitration agreements for delivery drivers. In a unanimous ruling, the Court held that the Federal Arbitration Act’s (“FAA”) transportation worker exemption can extend to delivery drivers who deliver goods originating out of state, even if their involvement is purely intrastate. The decision continues the Court’s recent trend of closely examining the scope of the FAA’s transportation worker exemption and may have substantial implications for employers in the logistics, delivery, retail and e-commerce sectors. Background The FAA generally requires courts to enforce valid arbitration agreements. Section 1 of the FAA, however, exempts certain “workers engaged in foreign or interstate commerce” from coverage under the statute (the “Section 1 Exemption”). The question decided by the Court was whether workers who complete the final leg of a delivery of goods intrastate, often referred to as “last-mile” drivers, are subject to the Section 1 Exemption of the FAA when the goods they deliver originated out of state. The worker at issue was an independent distributor who delivered goods from a warehouse in Colorado to retail outlets within Colorado. The goods, however, were shipped to the warehouse from out of state.  The Supreme Court’s Decision The Supreme Court concluded that the exemption may apply to last-mile delivery drivers if their work constitutes a direct part of the continuous interstate movement of goods. The Court thus declined to adopt a brightline rule that a worker must move interstate or even interact with a vehicle that moved across state lines, to fall within the Section 1 Exemption. Rather than looking at whether the worker personally engages in interstate movement, the Court explained that the relevant inquiry should be focused on the journey of the goods themselves to determine whether they are moving in a continuous interstate stream. Still, for the Section 1 Exemption to apply, the worker must play a direct, active and necessary role in that continuous interstate movement of the goods. What the Decision Means for Employers The ruling is likely to increase litigation over the scope of the Section 1 Exemption and may limit the effectiveness of arbitration agreements for certain categories of transportation workers involved in distribution and delivery operations. Employers that rely on arbitration agreements should be cognizant of the fact that workers who themselves do not cross state lines can still fall within the Section 1 Exemption. Industries potentially affected include: Package and parcel delivery services; E-commerce fulfillment and distribution operations; Retail delivery networks; Food and beverage distribution companies; and Third-party logistics providers. The decision may also encourage transportation workers to challenge arbitration agreements in wage-and-hour, discrimination and other employment-related disputes where the workers are connected to interstate supply chains. Steps Employers Should Consider In light of the Court’s ruling, employers should consider: Reviewing arbitration agreements applicable to drivers, couriers and delivery personnel; Assessing whether particular worker groups may qualify for the Section 1 Exemption; Evaluating alternative dispute resolution provisions under applicable state law; and Reexamining litigation strategies in pending matters involving transportation-related employees. Because the Court’s analysis focused heavily on the worker’s role within the broader movement of goods, future litigation will likely center on how closely particular job duties are tied to interstate commerce and the cross-state movement of goods. Employers should expect continued judicial scrutiny of arbitration programs involving transportation workers. Looking Ahead The Supreme Court’s decision represents another important development in the evolving landscape of employment arbitration. As businesses continue to rely on increasingly complex supply chains and delivery networks, courts will likely face additional questions regarding which workers fall within the Section 1 Exemption. Employers should work closely with counsel to evaluate arbitration agreements and workforce classifications to ensure dispute resolution programs remain enforceable and aligned with current legal developments. Contact your Polsinelli attorney for further guidance regarding the implications of this decision and other employment-related matters.

Key Highlights The Ninth Circuit affirmed a district court’s refusal to compel arbitration where an employer rolled out mandatory arbitration agreements during a pending wage-and-hour class action. The court emphasized that Rule 23(d) gives district courts broad authority to regulate communications with putative class members and protect the integrity of class proceedings. Employers considering arbitration agreements during active class litigation should carefully vet the timing, manner and messaging of any rollout to avoid communications that could be viewed as coercive or discouraging class participation. An employer’s arbitration rollout strategy matters just as much as the agreement itself.  Earlier this year, the Ninth Circuit issued an important decision that serves as a cautionary reminder that employers who wish to roll out arbitration agreements during a pending wage and hour class action must do so with careful consideration.  Otherwise, its efforts may prove futile.  How the Employer Introduced the Arbitration Agreement Avery v. TEKsystems, Inc., 165 F.4th 1219 (9th Cir. 2026) involved a putative class of recruiters who alleged that their employer, a professional staffing agency, had misclassified them as exempt and failed to pay them overtime or provide breaks.  After nearly two years of litigation and after class certification briefing, the employer rolled out a new, mandatory arbitration agreement applicable to class members and subsequently moved to compel arbitration against class members. After the district court denied the motion, the employer appealed. Why the Ninth Circuit Refused to Compel Arbitration The arbitration agreement was rolled out in two stages.  First, the employer sent an email to all employees attaching its mandatory arbitration agreement with a class-action waiver and an FAQ which provided additional commentary on class actions, including the company’s position that arbitration was “more efficient and cost effective.” Second, the employer sent another email to putative class members with a “Notice of Opt Out” form which provided that if employees wished to remain a part of the putative class, they could opt out of the arbitration agreement.  Rule 23(d) Gives Courts Broad Authority Over Class Communications The Ninth Circuit affirmed the denial and held that district courts have broad authority under Federal Rule of Civil Procedure 23(d) to protect the integrity of class proceedings and regulate putative class communications. Importantly, the court rejected the employer’s argument that the Federal Arbitration Act (“FAA”) required enforcement of the agreements, emphasizing that the district court’s ruling did not target arbitration itself, but rather the employer’s conduct in procuring the agreements. Key Takeaway for Employers Rolling out new arbitration agreements mid-litigation of a class action is not unlawful, but it does carry legal risks and therefore must be carefully vetted to maximize enforceability. Businesses considering new arbitration agreements should work closely with counsel to evaluate not only the substance of the agreements, but also the timing, manner and messaging of the rollout.  Even an otherwise enforceable arbitration agreement may not survive judicial scrutiny if implemented during active class litigation through communications that are anything less than clear, neutral, and free from language that could discourage class participation or effectively pressure employees to opt out. For assistance navigating employee arbitration agreements, contact your Polsinelli Labor & Employment attorney.

Key Takeaways: The U.S. Department of Labor has rescinded the 2024 rule that sought to expand overtime eligibility by raising the salary threshold for white-collar exemptions under the Fair Labor Standards Act. The DOL is reinstating the 2019 overtime salary threshold from the first Trump Administration: $684 per week ($35,568 annually). The Department of Labor (“DOL”) is putting things in reverse once again. On May 13, 2026, the DOL’s rescinded the 2024 Biden-era overtime rule, which substantially increased the salary thresholds for the Fair Labor Standards Act’s (“FLSA”) white-collar exemptions. Restoring the Trump-Era 2019 Threshold The FLSA generally requires employers to pay overtime to employees who work more than 40 hours per week. But under the White Collar Exemption, or Section 13(a)(1) of the FLSA, bona fide executive, administrative, and professional employees with certain duties and whose salaries exceed a given threshold are exempt from overtime requirements. The DOL’s Biden-era 2024 rule sought to raise the minimum salary threshold for executive, administrative, and professional employees from $684 per week to $844 per week beginning July 1, 2024, with a second increase scheduled for January 1, 2025, to $1,128 per week. The rule also increased the highly compensated employee threshold and included automatic updates every three years. In November 2024, the U.S. District Court for the Eastern District of Texas vacated the rule nationwide, holding in State of Texas v. U.S. Department of Labor that the DOL exceeded its authority by placing too much emphasis on salary level over employee duties. The court held that the sweeping increase effectively supplanted the duties test Congress intended to govern exempt status determinations. This lawsuit was one of several successful legal challenges to the 2024 rule. Notably, although the Biden Administration appealed those decisions to the Fifth Circuit, the current DOL recently dropped both appeals. The decision echoes prior judicial skepticism toward aggressive salary threshold increases. In 2017, another Texas federal court invalidated the Obama administration’s proposed overtime rule in Nevada v. U.S. Department of Labor for similar reasons. Immediate Impact on Employers The May 13, 2026 rescission means the DOL’s 2024 salary increases are officially no longer enforceable, and the salary threshold reverts to the prior level of $684 per week. The reinstatement of the 2019 threshold is effective immediately, and no notice or comment period will be available. Employers should remember that exempt status is not determined by salary alone. Rather, whether an employee qualifies as exempt still requires satisfaction of both the salary basis and duties tests. This reversion of the FLSA’s salary threshold does not supersede higher minimum salary thresholds for exempt employees set by individual states. Because of this, employers are urged to monitor state wage and hour laws to ensure that their exempt employees are receiving a salary that   equals or exceeds the higher of the federal or applicable state requirement – particularly for those organizations operating in multiple jurisdictions. For guidance on how this rule affects your business, contact your Polsinelli attorney.

Key Highlights The EEOC has submitted a proposed rule that could eliminate several federal EEO reporting requirements, including the EEO-1 Component 1 Report, but no changes are currently in effect. Employers should continue preparing for 2025 EEO-1 reporting obligations because the proposal is still under review and the EEOC must complete additional regulatory steps before any reporting requirements can be rescinded. Even if federal EEO reporting requirements change, employers may still have state and local workforce reporting obligations, including California’s annual pay and demographic reporting requirements for covered employers. On May 14, 2026, the U.S. Equal Employment Opportunity Commission submitted a proposed rule to the Office of Information and Regulatory Affairs (OIRA) titled “Rescission of EEO-1, EEO-2, EEO-3, EEO-4, EEO-5 and Reporting Requirement Under Title VII, the ADA, GINA and the PWFA.” The OIRA entry identifies the proposal as an economically significant proposed rule currently under regulatory review. Simply put, the EEOC appears to be considering whether to eliminate or substantially reduce several federal equal employment opportunity reporting requirements, including the EEO-1 Component 1 Report. That report currently requires covered private employers with 100 or more employees to submit annual workforce demographic data by job category, race, ethnicity and sex. Current regulations still require covered employers to file the EEO-1 each year and retain a copy of the most recent report. Employers should not assume the 2025 EEO-1 filing is canceled. The proposal must still move through additional administrative steps before it can change existing obligations. OIRA review is an initial step in the regulatory process. If the proposal moves forward, the EEOC would likely need to publish proposed regulatory text, allow for public comment and address related information collection requirements before any rescission could take effect. At this point, the EEOC has not yet issued any instructions or guidance for the 2025 EEO-1. In recent years, this report was due in June. For now, employers should continue preparing as though an EEO-1 filing may be required. Recent EEO-1 reporting periods have generally required employers to use a workforce snapshot from a pay period in October, November or December. Employers should also remember that a change to federal EEO reporting would not necessarily eliminate other workforce reporting obligations. Several states and localities impose their own reporting, pay data or recordkeeping requirements. California, for example, separately requires covered private employers with 100 or more payroll employees and covered private client employers with 100 or more labor contractor employees, to report pay, demographic and other workforce data annually to the California Civil Rights Department. What Employers Should Do Now While the proposal is pending, employers should consider taking the following steps: Continue collecting and validating EEO-1 data. Monitor EEOC, OIRA and Federal Register developments. Avoid deleting or changing demographic data practices without legal review. Confirm whether state or local workforce reporting requirements apply. Preserve existing EEO-1 data consistent with applicable law. This is a significant development, but not yet a rule change. Until the EEOC issues formal guidance or completes the required administrative process, employers should continue preparing for current reporting and recordkeeping obligations. Polsinelli’s Labor and Employment team will continue to monitor developments and provide updates as additional guidance becomes available. Please contact your Polsinelli Labor and Employment attorney with any questions.

The federal contracting landscape for diversity, equity and inclusion (DEI) initiatives is shifting rapidly. On March 26, 2026, President Trump issued Executive Order 14398, directing federal agencies to prohibit “racially discriminatory DEI activities” in federal contracts and across the entire supply chain. To that effect, within 30 days of the EO, federal agencies are directed to incorporate a specific clause in their federal contracts. Read the full update here.

Key Takeaways: The DOL has proposed a new multi-factor standard addressing vertical and horizontal joint employer status under the FLSA, FMLA and MSAWPA. The proposal could redraw wage-and-hour liability boundaries by expanding when multiple entities share responsibility. The Department of Labor strikes again. To help address circuit splits and compliance challenges on April 22, 2026, the DOL proposed a new rule attempting to establish a more uniform standard to determine whether joint employment exists under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA). Horizonal versus Vertical Joint Employment Joint employment is when a worker is considered employed by two or more entities such that each may be liable for compliance with the FLSA. Prior administrations have taken markedly different approaches—ranging from broader, worker-friendly interpretations to narrower, control-based frameworks—when determining whether joint employment exists, leaving employers navigating conflicting guidance. The DOL’s current proposal aims to resolve that inconsistency by creating separate tests for “vertical” and “horizontal” joint employment. Vertical joint employment exists when a worker has a direct employment relationship with one employer but is controlled by another. Horizontal joint employment exists when an individual works for two or more related employers that jointly control the work. The DOL’s proposed rule clarifies that horizontal joint employment would exist when separate entities are sufficiently related when it comes to the employment of a specific employee. “Sufficiently related,” for purposes of determining whether horizontal joint employment exists, does not require a formal affiliation but instead turns on whether the entities operate as part of a common business. The DOL will consider factors such as common ownership, overlapping management, shared operations, and coordination over employees in making this determination. In practice, the more the entities function as an integrated enterprise—rather than truly independent businesses—the more likely they are to be deemed sufficiently related and joint employers. Importantly, ordinary business relationships—such as franchising or vendor sharing—without involvement in the employee’s terms and conditions of employment would not, standing alone, establish joint employment. The Proposed Standard The proposed test for determining whether vertical joint employment exists is whether the potential joint employer: (1) hires or fires the employee (2) substantially supervises and controls the employee's schedule or conditions of employment (3) determines the employee's rate and method of pay (4) maintains the worker's employment records If the four factors unanimously point towards one finding or another, there would be a "substantial likelihood" that there is or is not joint employment. If the factors yield different conclusions, they are weighed holistically, and additional relevant factors may be considered. In practice, this signals a return to a control-based—but still flexible—analysis. Notably, the proposal excludes certain factors relevant in the independent contractor analysis—such as opportunity for profit/loss, investment, and special skills—confirming they are not relevant in determining whether joint employment exists. Where the FLSA and FMLA Converge The proposed rule could have a meaningful impact on FMLA coverage, particularly for employers near the 50-employee threshold. An employer is subject to the FMLA if it employs 50 or more employees within a 75-mile radius for at least 20 workweeks in the current or preceding calendar year. If the proposed rule results in a broader or more functional interpretation of joint employment, it could increase the likelihood that: A business is deemed a joint employer alongside a staffing agency, franchisee/franchisor, or subcontractor, and The workers in those relationships are aggregated when determining FMLA coverage. For some employers, this may be the most immediate compliance risk—not liability for wages, but newly triggered leave obligations. What Employers Should Know For employers, one of the most significant implications of the proposal is its potential to redraw liability boundaries. Businesses that have structured operations to minimize direct employment relationships—by outsourcing functions or relying on third-party labor providers—may face renewed scrutiny if they retain meaningful control over working conditions. Even “hands off” influence, if functionally significant, may favor a joint employment finding. In anticipation of the new rule, employers may consider: Reviewing contracts with staffing agencies and subcontractors to clarify independence Auditing the degree of control exercised over non-direct employees Assessing whether existing practices could be construed as indicative of joint employment Tracking state laws on joint employment to determine how different jurisdictional factors may converge Evaluating potential FMLA liability by recalculating employee counts, reviewing contracts and operational control over non-direct employees, and coordinating with staffing agencies on leave responsibilities and compliance protocols. While the DOL’s proposed rule likely won’t take effect until July, the takeaway is clear: if your business touches the work, it may own the risk. As the DOL continues to edge toward uniformity, the most successful organizations will be the ones that treat compliance as part of their business model moving forward. For questions about the proposal and its effects on employers, contact your Polsinelli attorney.

Key Highlights The Equal Employment Opportunity Commission has held Title VII permits federal agencies to maintain single-sex bathrooms/locker rooms and exclude transgender employees from opposite-sex facilities. While the decision applies only to the federal sector, it provides a roadmap for how the EEOC may analyze bathroom/locker room issues post-Bostock. Six years after the Supreme Court’s 2020 decision in Bostock v. Clayton County reshaped Title VII, the EEOC has addressed an unanswered question from that decision: whether Title VII requires a federal agency to allow a transgender employee to use bathrooms and locker rooms consistent with the employee’s gender identity. Selina S. v. Daniel Driscoll, Secretary, Department of the Army, EEOC Appeal No. 2025003976 (Feb. 26, 2026). Inside the EEOC’s Holding The case involves a civilian employed by the U.S. Army who had used male-designated restrooms and locker rooms without issue. In 2025, the complainant informed management that he identified as a woman and requested access to female-designated facilities. The agency denied the request based on guidance requiring sex-based designation of “intimate spaces.” The EEOC framed the appeal as presenting an issue not “authoritatively addressed” — whether Title VII’s prohibition on discrimination “because of sex” extends to access to sex-designated bathrooms and locker rooms. The analysis relied heavily on Bostock, which held that firing (or refusing to hire) someone “simply for being . . . transgender” is discrimination “because of . . . sex” under Title VII. Bostock, however, left open the question of access to “bathrooms, locker rooms, or anything else of the kind.” Using that framing, the EEOC treated restroom and locker room access as a distinct issue. The EEOC concluded that Title VII permits federal agencies to maintain single-sex bathrooms and similar intimate spaces and to exclude employees from opposite-sex facilities. Exclusion from intimate spaces by itself, the Commission clarified, does not state a plausible Title VII claim. Applying what it characterized as an “equal treatment” approach, the EEOC reasoned that a policy separating bathrooms by biological sex does not constitute unlawful discrimination if applied equally to all employees, regardless of transgender status. According to the majority, men and women are not similarly situated in intimate spaces, and sex-based separation in those contexts reflects privacy interests and biological distinctions rather than discriminatory animus. Given the decision arises in the federal administrative context, judicial review is possible. Federal courts are not required to adopt the EEOC’s interpretation. We anticipate continued litigation in this area is likely, given Bostock’s unsettled scope. Why This Matters While the decision does not apply to private-sector employers, it provides insight into how the EEOC may approach facility-access claims. The decision distinguishes between adverse employment actions based on transgender status — squarely addressed in Bostock— and access to sex-designated intimate spaces, which Bostock did not resolve. Additionally, the ruling does not provide a safe harbor for employers’ decisions concerning employees’ access to intimate spaces. Federal courts remain divided on Bostock’s reach, and many state and local laws expressly require that employees be permitted to access facilities consistent with their gender identity. Employers operating across jurisdictions might consider evaluating whether a uniform nationwide policy creates compliance risk in particular states or municipalities. Workplace safety guidance and other regulatory considerations may also intersect with facility-access policies. For federal contractors and subcontractors, the practical impact may be more immediate. Contractors often operate on federal property and alongside federal employees. Contractors operating on federal property may face operational and employee-relations challenges if agency rules governing facility access differ from internal policies. Contractors might consider reviewing site-specific access protocols, assessing alignment between employee handbooks and federal worksite rules and reviewing supervisor training on addressing related employee concerns. Looking Ahead The contours of Title VII’s application to bathroom and locker room access remain unsettled. Continued litigation is likely, and further judicial clarification may follow. Polsinelli attorneys will continue to monitor developments in light of evolving federal, state and local requirements. Employers with questions about the EEOC’s decision or compliance considerations should consult their Polsinelli Labor and Employment attorney.

Key Highlights DOL Clarifies Bonus Treatment Under the FLSA: In Opinion Letter FLSA2026-2 (Jan. 5, 2026), the Department of Labor confirmed that certain performance-based bonuses must be included in the “regular rate of pay” when calculating overtime. Advance Promises Eliminate Discretion: Bonuses are not considered “discretionary” if the employer communicates the criteria and amounts in advance. Once promised, the employer has “abandoned” discretion under the FLSA. Impact on Overtime Calculations: Because the safety and performance bonuses at issue were non-discretionary, they must be included in the regular rate for any workweek in which they are earned—requiring employers to review bonus programs to ensure proper overtime compliance. On January 5, 2026, the U.S. Department of Labor’s  Wage and Hour Division (the “DOL”) issued Opinion Letter FLSA2026-2 addressing the question of whether an employer must include certain bonus payments in the “regular rate of pay” when calculating an employee’s overtime pay under the Fair Labor Standards Act (“FLSA”). Background: The Employer’s Safety and Performance Bonus Plan The DOL’s letter responds to an inquiry from an employee who worked in the waste management industry inquiring whether certain performance-based bonuses were considered “discretionary bonuses” that could be excluded from the “regular rate” for purposes of calculating overtime for   hourly, non-exempt employee drivers of the employer. Specifically, the employer provided certain performance-based bonuses pursuant to a “Safety, Job Duties, and Performance” bonus plan designed to reward an employee’s punctuality, attendance, consistency in completing daily safety tasks, driving safety, compliance with traffic laws, proper attire, and performance efficiency. The amounts of the bonus, as well as the criteria to earn such bonuses, were communicated to the employees as part of a bonus plan prior to any employee meeting the performance requirements. What Qualifies as a “Discretionary” Bonus Under the FLSA? The DOL concluded that the bonus payments were not discretionary. In its letter, the DOL explained that, to be considered an excludable discretionary bonus under the FLSA, the payment must satisfy three conditions: (1) the fact and amount of the payment must be determined at the sole discretion of the employer; (2) the employer’s determination must occur at or near the end of the period when the employee’s work was performed; and (3) the payment must not be made pursuant to any prior contract, agreement, or promise that causes the employee to expect such payments regularly. 29 U.S.C. § 207(e)(3). The DOL reasoned that while the employer technically had initial discretion in deciding whether it would offer the bonus program, and on what terms, it had communicated the criteria for receiving the bonus to its employees well in advance of their performing work. As a result, the fact and amount of the bonus payments were not made at the “sole discretion of the employer at or near the end of the period” in which the work was performed. This is consistent with the FLSA’s regulations, which provide: “If the employer promises in advance to pay a bonus, he has abandoned his discretion with regard to it.” 29 C.F.R. § 778.211(b). DOL’s Conclusion: Bonuses Must Be Included in the Regular Rate Because the bonuses at issue were not discretionary, the DOL concluded that the employer must include the bonus payments in the regular rate of pay in any workweek for which they are earned when calculating overtime for the drivers. Employer Takeaways and Compliance Considerations Employers providing performance-related bonuses should keep the three factors outlined by the DOL in mind and should review their policies and practices to ensure all such bonuses are properly classified as either discretionary or non-discretionary so that the regular rate is properly calculated when paying overtime. For questions and assistance regarding the inclusion of bonus payments or other issues involving the FLSA or wage-and-hour laws, please contact your Polsinelli attorney.

Key Takeaways:  DOL Moves to Reinstate Business-Friendly Independent Contractor Standard: The Department of Labor has proposed rescinding the 2024 independent contractor rule and returning to a more flexible “economic reality” test that emphasizes two core factors — control and opportunity for profit or loss — potentially narrowing federal misclassification exposure under the FLSA. NLRB Restores 2020 Joint Employer Rule: The NLRB has formally reinstated the Trump-era standard requiring “substantial direct and immediate control” for joint employer status, limiting liability based solely on indirect or reserved control and reducing bargaining and unfair labor practice exposure for many businesses. Despite the clocks moving forward this week, federal employer classification standards are turning back. The Department of Labor (DOL) and National Labor Relations Board (NLRB) have recently moved to restore Trump-era employment standards that reshape worker classification for businesses across industries. These developments mark a significant shift in federal labor policy with implications for employers navigating classification, franchising, staffing and gig-economy models. DOL Proposes Rescission of 2024 Independent Contractor Rule After abandoning the Biden administration’s 2024 independent contractor test, the DOL announced a proposed rule on Feb. 26, 2026 to replace its current enforcement scheme under the Fair Labor Standards Act (FLSA), which applied a six-factor “totality of the circumstances” economic realities analysis without assigning weight to any particular factor. Under the DOL’s proposal, the independent contractor standard will again be tested by the “economic reality,” focusing on whether an individual is dependent on an employer or in business for themselves. This signals a return to a more flexible, business-friendly analysis. DOL Wage and Hour Division Administrator Andrew Rogers stated: “Generally, if a worker is economically dependent on an employer for work, he or she is an employee. Generally, if a worker is in business for him or herself and isn't dependent on an employer for work, the worker is an independent contractor.” While the 2024 rule weighed six factors equally, the DOL’s proposal will apply a list of five non-exhaustive factors while elevating two to “core factors”: the nature and degree of control; and the worker’s opportunity for profit and loss. The others become less probative “guideposts”: skill required; permanence of the relationship; and integration into the employer’s production process. The intent is to look at the “actual practice” of the parties rather than what may be contractually or theoretically possible. In emphasizing control and opportunity for profit/loss, the DOL appears to be narrowing employers’ misclassification exposure under the FLSA, particularly in industries where workers exercise meaningful entrepreneurial discretion. Although this shift aligns more closely with Supreme Court and federal appellate precedent, employers should not assume that federal enforcement risk will disappear. Private plaintiffs’ attorneys are likely to continue pursuing collective and class actions, and state-law classification standards remain unaffected. Employers should review their current classification practices and prepare to update policies and training. NLRB Reinstates Trump-Era 2020 Joint Employer Standard The NLRB also formally reinstated the 2020 joint employer rule on Feb. 26 after a federal court vacated the Biden-era’s broader definition. Under the rule, joint employer status requires “substantial direct and immediate control” over one or more essential terms and conditions of employment such that it “meaningfully affects matters relating to the employment relationship.” Further, “substantial direct and immediate control” must have a “regular or continuous consequential effect” on employment terms, not control exercised only on a “sporadic, isolated, or de minimis basis.” Reserved or indirect control alone is generally insufficient. Reinstating the 2020 rule is expected to have an outsized impact on franchisors, staffing companies, private equity-backed platforms and businesses operating through layered contracting relationships. By requiring exercised or direct control, the rule will likely meaningfully limit federal bargaining obligations and unfair labor practice exposure tied to another entity’s workforce. Still, contractual language and day-to-day operational practices must align to avoid inadvertently triggering joint employer status. Employers should review current workforce relationships to assess potential obligations for bargaining and unfair labor practice exposure. Companies with pending NLRB matters or organizing activity should evaluate how the reinstated standard may affect strategy, particularly where joint employer allegations were previously asserted. Why This Matters Together, these developments signify the Trump administration’s employer-friendly approach to rulemaking and reflect a narrower federal interpretation of independent contractor and joint employer standards. While both rules may face continued legal scrutiny, employers should use this moment to proactively review independent contractor models, audit franchise and staffing arrangements, align operations with contractual intent and evaluate classification risks under relevant state standards. Polsinelli will continue to report on any DOL and NLRB updates related to these standards. Please contact your Polsinelli attorney for more information.

With a wave of rapid-fire executive orders and the expanding use of artificial intelligence in agency enforcement, 2026 is already shaping up to be a pivotal year in Washington. But beyond the headlines, what do these developments really mean for businesses? In the latest episode of the D.C. Download podcast, Labor & Employment Shareholder Will Vail joins for a timely discussion on what comes next. From implementation challenges and emerging litigation trends to shifting appropriations dynamics, the conversation explores how policy decisions are translating into regulatory action. The episode also offers practical, forward-looking strategies for navigating an increasingly complex and evolving regulatory landscape. Listen to the latest episode here.

Over two years ago, the Northern District of California issued an order requiring the OFCCP to disclose EEO-1 Type 2 reports to the Center for Investigative Reporting (“CIR”) over the objections of thousands of employers, as previously reported. In the interim, OFCCP did not release the reports for those employers who had objected as they appealed the District Court’s decision to the Ninth Circuit. In 2025, the Ninth Circuit affirmed the District Court’s decision that the EEO-1 reports did not contain “commercial” information that would be protected from disclosure pursuant to an exemption under the Freedom of Information Act (“FOIA”). The case remains pending in the District Court with other issues to be resolved. However, the Ninth Circuit’s decision became final after the OFCCP chose not to seek rehearing of the issue – and the parties filed a stipulated proposal with the District Court regarding the end of the stay of the release of the reports. The District Court granted the stipulation on February 9, 2026, which will allow for the release of the reports from 2016-2020. The District Court has now ordered the following by February 11, 2026: OFCCP shall release the reports of five “bellwether” objecting contractors which were considered in making the determination of whether the reports contained “commercial information.” OFCCP shall provide notice to the additional 4,500+ objecting contractors that their reports will be released on February 25, 2026. Contact your Polsinelli attorney for further guidance regarding the release of the reports, the potential effect of the release on your organization, and other government contractor matters.

Key Takeaways FTC to revisit a national non-compete ban: The FTC will host a Jan. 27, 2026 workshop as it restarts efforts to regulate or potentially ban most non-competition agreements nationwide. Renewed effort follows prior rule’s collapse: The workshop comes after the FTC’s 2024 final rule banning non-competes was blocked in court, vacated and ultimately abandoned due to legal and administrative challenges. Future national standard possible: The workshop may signal the first step toward a new FTC rule, despite current non-compete enforceability continuing to vary significantly by state law. The FTC appears poised to renew its years-long effort to address, and potentially ban, most non-competition agreements on a national level. On Jan. 27, 2026, the Federal Trade Commission will host a workshop titled, “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements.” The FTC reports that the workshop “will include public statements from FTC Commissioners, victims of unfair and anticompetitive noncompete agreements and leading experts in the field.” The workshop follows years of national attention and contentious litigation regarding the FTC’s prior attempt to impose a national ban on most non-competition agreements. The FTC’s effort started in January 2023, when the FTC proposed a rule to ban most non-competition agreements. In April 2024, the FTC issued a final rule banning most non-competition agreements nationwide effective Sept. 4, 2024, but employer groups quickly filed lawsuits challenging the rule. In August 2024, a Texas district court enjoined the final rule’s enforcement as arbitrary and capricious. The FTC appealed the injunction to the Fifth Circuit but subsequently vacated the final rule and dropped the appeal, citing legal issues and administrative changes. Now, it appears that the FTC is ready to take up the issue again — and the January workshop could be the first step towards issuing another rule that would provide a national standard for addressing non-competition agreements. Currently, the validity and enforceability of non-competition agreements are governed by state law, which varies widely from state to state. The workshop will be held from 1-5 p.m. ET on Jan. 27, 2026, and it will be open to the public. Attendees must register in advance to attend in person at the FTC’s headquarters or attendees may attend via livestream. Polsinelli Restrictive Covenant Attorneys will be in attendance at the workshop. If you currently have or are thinking about implementing non-competition agreements in your workforce, it is important to have an attorney well-versed in non-competition law review your agreements for compliance with all applicable state laws. Please contact your Polsinelli attorney for help reviewing or updating your agreements and broader non-compete strategy.  

Key Highlights Under Section 503 of the Rehabilitation Act (Section 503) (extending protection to individuals with disabilities), the basic coverage threshold increased from $15,000 to $20,000. Under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) (extending protection based on veteran status), the basic coverage threshold increased from $150,000 to $200,000. Although the Affirmative Action Program (AAP) coverage remains the same for Section 503, the AAP coverage requirements increased accordingly for the VEVRAA and now apply to contractors and subcontractors with at least 50 employees and a single contract of $200,000 or more. On October 1, 2025, the Office of Federal Contract Compliance Programs (OFCCP) increased the jurisdictional thresholds for two key federal contractor laws: Section 503 and the VEVRAA. These higher thresholds affect whether a contractor is covered by each law and, as a result, whether it must maintain written AAPs for individuals with disabilities and protected veterans. The increases result from the Federal Acquisition Regulatory Council’s periodic review and inflationary adjustment of “acquisition-related” thresholds in federal procurement statutes as required by Section 807 of the Ronald Reagan National Defense Authorization Act (41 U.S.C. § 1908). As part of its assistance efforts, the OFCCP has issued a “Jurisdictional Thresholds” infographic and updated its webpage with additional guidance and tools. While federal affirmative action plan requirements for women and minorities have changed significantly in 2025, federal contractors are reminded that affirmative action requirements for individuals with disabilities and veterans remain in effect for covered contractors. If you have questions about how these updated thresholds apply to your organization—or whether your contracts and workforce size trigger written AAP obligations—Polsinelli’s Labor and Employment attorneys are available to assist.

Key Highlights NLRB Poised for a Partisan Shift: With the Senate HELP Committee advancing two of President Trump’s nominees, the NLRB may soon regain a quorum and shift to its first Republican-led majority since 2021 — potentially signaling changes to existing federal labor law. Expanded Remedies Under Thryv Remain in Force — for Now: The NLRB’s Thryv, Inc. decision (2022) broadened employer liability in unfair labor practice cases by requiring compensation for all “direct or foreseeable” harms. Courts Split on the NLRB’s Authority: Federal appellate courts have issued conflicting rulings on the NLRB’s power to award these expanded damages — creating uncertainty until the NLRB or the Supreme Court provides further clarity. Employers Should Prepare for Policy Shifts: A Republican-led majority on the NLRB could narrow Thryv remedies and reexamine key doctrines affecting joint-employer standards, independent-contractor classifications, and union election rules. Employers should monitor developments closely and seek counsel on pending or potential labor disputes. On Oct. 9, 2025, the Senate Health, Education, Labor & Pensions (HELP) Committee advanced two of President Trump’s three pending nominations to the National Labor Relations Board (NLRB). Although the third nominee was tabled following a divided vote, the approvals signal the NLRB may soon regain a quorum and operate under a Republican-led majority for the first time since 2021. Why It Matters Historically, when the NLRB flips partisan control, prior precedent — especially decisions viewed as favorable to labor or broad in scope — often comes under review. Large employers should monitor several key implications: Unfair labor practice liability remains significant under current NLRB law, and U.S. Courts of Appeal have disagreed on whether the NLRB has exceeded its statutory authority. In its December 2022 decision in Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022), the NLRB significantly expanded its remedial authority in unfair labor practice cases. The decision clarified that in all cases where a standard make-whole remedy would apply, employers must “compensate affected employees for all direct or foreseeable pecuniary harms . . . suffer[ed] as a result of the [employer’s] unfair labor practice.” The NLRB expressly moved beyond traditional backpay and reinstatement relief to authorize reimbursement of additional costs like out-of-pocket medical expenses and credit card debt. Appellate courts have disagreed on the NLRB’s authority to expand unfair labor practice remedies.Most recently, the Court of Appeals for the Ninth Circuit upheld the NLRB’s use of the Thryv framework in International Union of Operating Engineers, Local 39 v. NLRB. The Ninth Circuit found the NLRB did not exceed its statutory authority in awarding Thryv damages and enforced the NLRB’s remedy order. The Court of Appeals for the Third Circuit took a different tack earlier this year. In its Starbucks-related decision, the Third Circuit held the NLRB’s remedial order for consequential damages exceeded the NLRB’s authority. It reasoned that Congress did not empower the NLRB to award full compensatory damages of that nature. If the NLRB retains a quorum, we expect it to revisit the expanded remedies under Thryv. If the full Senate confirms the two nominees to the NLRB, employers should anticipate that the NLRB will revisit the remedial doctrine set forth in Thryv. While the second Trump administration has indicated an intent to be more labor friendly, a Republican majority may choose to reinstate narrower remedial parameters, limit the “direct or foreseeable” horizon, or otherwise reduce employer exposure. Until such a shift occurs, however, the current Thryv-based standard remains in force and applicable before the NLRB and across circuits that have upheld it. Looking Ahead The HELP Committee’s approvals signal a likely realignment in the months ahead but not an immediate one, as it remains unknown as to when or whether the NLRB will have a quorum. A new NLRB majority may act quickly once seated to revisit recent precedents—not only Thryv, but also rules governing joint-employer status, independent-contractor classifications and union election procedures. The coming months will be a period of heightened uncertainty for employers navigating ongoing unfair labor practice matters. Employers facing organizing activity or unfair labor practice allegations should consult with an experienced member of Polsinelli’s Management-Labor Relations Practice Group to assess how forthcoming NLRB changes may affect exposure, negotiation strategy and overall labor-relations planning.

On Sept. 19, 2025, President Trump signed a Proclamation, Restriction on Entry of Certain Nonimmigrant Workers, requiring a $100,000 payment with any new H-1B petition filed on or after Sept. 21, 2025, including those for the 2026 lottery. While the restriction does not apply to petitions filed before that date, approved petitions, or valid visa holders, questions remain regarding its impact on extensions and transfers. Given the fluid and evolving nature of these changes, employers and visa holders should exercise caution, particularly with international travel, and consult your Polsinelli Immigration counsel or Polsinelli’s Executive Action Working Group with any questions. Read the full update.

Key Highlights End of nationwide ban efforts: The FTC has officially moved to dismiss its appeals and voted to vacate its proposed nationwide non-compete ban, signaling the end of its push for a universal prohibition. Shift to targeted enforcement: While dropping the broad ban, the FTC remains committed to scrutinizing non-competes on a case-by-case basis, particularly in industries like healthcare and staffing where such agreements are prevalent. Immediate employer impact: On Sept. 10, 2025, the FTC sent letters to large healthcare and staffing employers urging a review of non-competes and restrictive agreements, indicating an enforcement focus in those sectors, alongside a broader public inquiry open until Nov. 3, 2025. Guidance for compliance: Commissioner Meador outlined key factors that the FTC will consider when assessing non-competes, including wage and skill level, scope and duration, less restrictive alternatives and market power — making it essential for employers to review and refine their covenants to align with federal scrutiny and evolving state laws. On Sept. 5, 2025, the FTC moved to dismiss its appeals of injunctions blocking the enforcement of the non-compete ban it sought to implement nationwide last year. That same day, the FTC voted 3-1 to take steps to vacate the ban. These moves mark the end of the FTC’s efforts to implement a universal ban on non-competes, following a change in administration and FTC leadership. However, recent FTC actions suggest the agency remains focused on non-compete agreements, especially in the healthcare and staffing industries. Renewed scrutiny: Rather than pursuing a blanket ban, the FTC is pivoting to case-by-case enforcement and targeting covenants that it views as unfair or anticompetitive. On Sept. 10, 2025, the FTC sent letters to several large healthcare employers and staffing firms urging them to conduct a comprehensive review of their employment agreements — including any non-competes or other restrictive agreements — to ensure they are appropriately tailored and comply with the law. These letters suggest the FTC intends to initially direct its scrutiny of non-competes to the healthcare and staffing industries The FTC’s move parallels state-level action in places like Colorado, Texas and Pennsylvania, which have adopted stricter limits on non-competes in health care, as previously reported by Polsinelli. In addition, the FTC has also launched a public inquiry — open until Nov. 3, 2025 — through which the public may submit information that may be used to inform future enforcement actions. Importantly, this public inquiry is not limited to the healthcare or staffing industries, meaning the FTC’s scrutiny may expand to other sectors. FTC provides roadmap to enforcement priority: In announcing the FTC’s intent to revoke the non-compete ban, Commission Meador issued a statement identifying several contextual and legal factors to help evaluate non-compete provisions: Employee wage and skill level; Deployment in a distribution network (for example, non-competes in the franchise context); Independent contractors; Likelihood of free riding (employer investments in training, employee access to confidential information); Availability of less restrictive alternative; Scope and duration; Market power; and Evidence of economic effects. Impact on current non-competes: Employers should carefully review their non-compete covenants to ensure they are carefully drafted and aligned with both federal and state law. The FTC has made it clear that enforcement is coming — just not through a single sweeping rule. Additionally, in light of the factors from Commissioner Meador, employers should consider their overall non-compete strategy, including which workers are required to enter non-competes and whether alternative tools are available to protect their business interests. Please contact your Polsinelli attorney for help reviewing or updating your agreements and broader non-compete strategy.    

On July 28, 2025, the United States Office of Personnel Management (“OPM”) issued a memorandum endorsing federal employees expressing their religious beliefs in the workplace. Specifically, OPM Director Scott Kupor instructed government agencies to “allow personal religious expression by Federal employees to the greatest extent possible unless such expression would impose an undue hardship on business operations.” Although this memorandum does not directly contemplate any new direction for private employers, it raises questions about whether this guidance signals impending changes in the private sector. What Does This Mean for the Federal Workplace? The OPM memorandum directs federal employers to permit religious expression in the workplace to the same extent as other non-religious, private expression. Stated otherwise, the OPM is encouraging federal employees to fully express their religious beliefs. This is a unique policy stance that has not been observed in recent memory. The OPM offered a handful of “categories” to demonstrate what religious conduct should be permitted, including: Display and use of items used for religious purposes or religious icons Expressions by groups of federal employees Conversations between federal employees Expressions among or directed at members of the public Expressions in areas accessible to the public The OPM memorandum clarifies that the “undue hardship” exception remains but avoids discussing it in much detail. Absent evidence to the contrary, it is expected that the OPM will utilize the standard endorsed by the Supreme Court in 2023. Groff v. DeJoy, 143 S. Ct. 2279 (2023). In Groff, the Supreme Court held that “undue hardship is shown when a burden is substantial in the overall context of an employer’s business,” “tak[ing] into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.” What Type of Belief Is “Religious” According to the OPM? Notably, the OPM memorandum defers to traditional Title VII analyses for determining what would constitute a “sincerely held religious belief” warranting protection. The EEOC has been abundantly clear that protections are not just reserved for traditional, organized religions such as Christianity, Judaism, Islam, Hinduism or Buddhism, but rather a realm of “moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views.” Further, the Supreme Court has made it clear that it is not a court’s role to determine the reasonableness of an individual’s religious beliefs, and that “religious beliefs need not be acceptable, logical, consistent, or comprehensible to others in order to merit First Amendment protection.” In sum, the best practice for federal employers is to take a broad approach to defining religion in the workplace to avoid any semblance of discriminatory conduct, so long as the expression of these beliefs does not constitute a true “undue hardship.” What About Private Employers? While this memorandum does not apply to private employers, Title VII does. Thus, it raises serious questions about whether the EEOC will follow suit by taking inspiration from the new OPM memorandum. In the past, the EEOC has issued guidance cautioning private-sector supervisors from engaging in religious expression that might reasonably appear coercive due to their supervisory role. The OPM’s memorandum, however, takes a different stance, explaining supervisors should not be treated any differently than non-supervisors on the basis of their workplace roles. It is expected this change of tune will work its way into the private sector sooner rather than later, whether it be through EEOC guidance or private employer policy changes attempting to mimic OPM guidance. Another possibility on the horizon could include whether the federal government issues similar requirements for all federal contractors, which would drastically increase the impact of expansion of religious expression. As with everything in the practice of law between different administrations, time will tell. What Should Private Employers Do Next? As these changes are implemented at the federal level, private employers should take a look in the mirror to see whether their current policies and procedures align with current guidance on religious expression in the workplace. For assistance in reviewing internal policies and procedures on religious expression in the workplace, be sure to contact your Polsinelli attorney.

On July 17, 2025, President Trump announced his selection of two choices for the National Labor Relations Board (NLRB). The President tapped Scott Mayer and James Murphy to fill those seats. If confirmed, Mayer and Murphy would fill two seats that have been vacant since President Trump returned to the White House. Mayer currently serves as Boeing’s Chief Labor Counsel and has been in that role since 2022. Murphy is a longtime NLRB official who first clerked for the NLRB in 1974 and most recently served as Chief Counsel to Marvin Kaplan, chair of the NLRB. Both bring strong management-side credentials to the table. Subject to Senate confirmation, Mayer and Murphy filling two of the three vacant seats will provide the NLRB with a quorum and enable it to issue decisions, engage in rulemaking, and fulfill its statutory duties. The NLRB has lacked a quorum since President Trump’s controversial termination of former member Gwynne Wilcox. Those in opposition to their nomination argue that, procedurally, they should not be confirmed until the validity of the termination of Wilcox is resolved by the federal courts. For questions regarding these nominations, the anticipated impact of the NLRB regaining a quorum, or other labor-related issues, please contact a member of Polsinelli’s Management-Labor Relations Practice Group.

What you need to know: DOL will no longer seek liquidated (double) damages in pre-litigation FLSA settlements, limiting recovery to unpaid wages. Liquidated damages still apply in court cases, so employers remain at risk in litigation. Early in the Biden administration, the Wage and Hour Division of the Department of Labor (“WHD”) issued Field Assistance Bulletin No. 2021-2 reversing practices adopted during the first Trump administration and returning to a more vigorous pursuit of liquidated damages from employers in pre-litigation investigations regarding potential violations of the Fair Labor Standards Act (“FLSA”). Now, just a few months into the second Trump administration, the WHD has reversed course again. Pursuant to Field Assistance Bulletin No. 2025-3, FAB No. 2021-2 is rescinded and the WHD will limit all pre-litigation administrative settlements to the recovery of unpaid wages or overtime compensation. It will no longer request any liquidated damages in pre-litigation investigations or resolutions. Liquidated damages are essentially “double damages,” requiring an employer that is liable for minimum wage or overtime compensation violations pay a second amount equal to the unpaid wages. In explaining this new approach, the WHD noted that Congress had “authorized” liquidated damages “only in judicial proceedings – not administrative matters” under the FLSA’s Section 216(c), which allows the DOL to “supervise the payment” of unpaid wages or overtime compensation to employees. It is the WHD’s opinion that is it “not authorized to seek liquidated as part of any payment it supervises under § 216(c).” The WHD also pointed to Section 260 of the FLSA to support its conclusion, because that Section vests courts – not the Agency – with the authority to evaluate employer’s good faith defenses that might preclude a recovery of liquidated damages. FAB 2025-3 states that “[t]he structure of § 260 reinforces that liquidated damages are a judicial remedy, and not an administrative tool available.” The practice of seeking liquidated damages in pre-litigation investigations and settlements began in 2010 under the Obama administration. While the first Trump administration attempted to rein this practice in to an extent with FAB No. 2020-2, the current stance is more aggressive. Of course, liquidated damages remain available in any litigation involving an FLSA violation – whether that litigation is brought by the WHD/DOL or a private party. For questions and assistance regarding WHD wage-and-hour investigations or other issues involving the FLSA or other wage-and-hour laws, please contact your Polsinelli attorney. 

The Ninth Circuit has now joined a growing number of appellate courts holding that, in Fair Labor Standards Act (FLSA) collective actions, personal jurisdiction must be determined on a claim-by-claim basis when general jurisdiction over the defendant is absent. In Harrington v. Cracker Barrel Old Country Stores, Inc., a group of current and former employees alleged that Cracker Barrel had violated the FLSA in its treatment of tipped workers’ wages. The case was filed in the District of Arizona, though Cracker Barrel is incorporated and headquartered in Tennessee. The plaintiffs sought conditional certification of a nationwide collective action. Following the traditional two-step certification process, the district court conditionally certified the collective and authorized notice to be sent nationwide, reasoning that the presence of a single plaintiff with a connection to the forum state sufficed to establish specific personal jurisdiction for all claims. Cracker Barrel then asked for an interlocutory appeal on three issues. The Ninth Circuit affirmed the district court on two, but took up the third question: Does the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California apply to FLSA collective actions in federal court, thereby rendering nationwide notice improper? In Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. 255 (2017), the Supreme Court held that the Fourteenth Amendment’s Due Process Clause prohibits state courts from exercising specific personal jurisdiction over claims by non-resident plaintiffs against a non-resident defendant when the claims lack a sufficient connection to the forum state. The Third, Sixth, Seventh and Eighth Circuits have already extended this principle to FLSA collective actions, while only the First Circuit has reached a different conclusion. Aligning with the majority, the Ninth Circuit held that when a collective action is based on specific personal jurisdiction — that is, where the defendant is neither incorporated nor headquartered in the forum state — each opt-in plaintiff’s claim must be evaluated for its connection to the defendant’s activities in that state. Accordingly, the Ninth Circuit reversed the District of Arizona’s authorization of nationwide notice, concluding it was based on the “mistaken assumption” that such specific personal jurisdictional analysis was unnecessary. For questions and assistance regarding collective actions or other issues involving the FLSA or other wage-and-hour laws, please contact your Polsinelli attorney. 

Colorado generally prohibits restrictive covenants, except in narrow circumstances. On May 8, 2025, the Colorado Legislature passed Senate Bill 25-083, which imposes three significant new limitations on the use of restrictive covenants for certain healthcare providers and narrows their application in business sales. These changes will apply to agreements entered into or renewed on or after August 6, 2025. Current Law Overview Under current law (C.R.S. § 8-2-113), non-compete and customer non-solicitation agreements are enforceable only in certain circumstances. For instance, non-competes are enforceable for “highly compensated individuals” when the agreement is reasonably necessary to protect an employer’s trade secrets. However, covenants that restrict a physician’s right to practice medicine after leaving an employer are already void under Colorado law. Key Changes Under SB25-083 Broader Ban on Non-Competes for Healthcare Providers The amendment prohibits non-compete and non-solicitation agreements for certain licensed healthcare providers, even if they meet the "highly compensated" threshold. This includes those who: Practice medicine or dentistry Engage in advanced practice registered nursing Are certified midwives Fall under additional categories listed in C.R.S. § 12-240-113 Liquidated Damages in Physician Contracts Previously, physician employment agreements could include liquidated damages tied to termination or competition. This amendment removes that provision, meaning that: Agreements with unlawful restrictive covenants are unenforceable. Agreements without unlawful provisions remain enforceable and may still carry damages or equitable remedies. It remains unclear whether competition-related liquidated damages are still enforceable under the new law. Expanded Patient Communication Rights Medical providers can no longer be restricted from informing patients about: Their continued medical practice New professional contact information The patient’s right to choose their healthcare provider Confidentiality and trade secret agreements are still allowed, as long as they don’t prevent sharing general knowledge. New Limitations on Business Sale Non-Competes Colorado law has long permitted non-competes in connection with the purchase or sale of a business. SB25-083 narrows this by: Allowing non-competes only for owners of a business interest Placing time limits on non-competes for minority owners or those who received ownership through equity compensation For these individuals, the non-compete duration is capped using a formula: Total consideration received ÷ Average annual cash compensation in the prior two years, or the duration of employment if less than two years. For questions and assistance regarding the upcoming changes to restrictive covenants in Colorado, please contact your Polsinelli attorney.

On June 12, 2025, the Department of Homeland Security (DHS) began sending termination notices to foreign nationals paroled into the United States under a parole program for Cubans, Haitians, Nicaraguans and Venezuelans (CHNV). The terminations are legally allowed under a May 30, 2025, decision by the US Supreme Court lifting a federal district court injunction that had temporarily barred the federal government from implementing the revocations. The termination notices inform the foreign nationals that both their parole is terminated, and their parole-based employment authorization is revoked – effective immediately. Employer Obligations The Immigration law provides that it is unlawful to continue to employ a foreign national in the U.S. knowing the foreign national is (or has become) an unauthorized alien with respect to such employment. How will an employer know if an employee has lost work authorization? For E-Verify users, E-Verify is in the process of notifying employers and employer agents that they need to log in to E-Verify and review the Case Alerts on the revocation of Employment Authorization Documents (EADs). The employer is then on notice that an employee has lost work authorization. However, many employers are not enrolled in E-Verify. Those employers may learn of a revocation when an employee presents the termination notice to the employer. Also, as the CHNV revocation is in the news, DHS may consider employers on notice, with an obligation to review the status of its employees to determine whether workers have lost authorization to work. At this point, DHS has not provided guidance to employers on their obligations, but we recommend employers act cautiously and take reasonable steps to determine whether company employees are impacted. We encourage taking these steps: Employers should review their I-9 records and supporting documents to determine if employees have employment authorization cards with the code C11, and that the country of citizenship on the card lists Cuba, Haiti, Nicaragua or Venezuela. When an employer is notified or discovers that an employee's C11 work authorization has been revoked, the employer should not immediately terminate the employee. Certain individuals, even from the impacted countries, may have C11 work authorization separate and apart from the CHNV program. These work authorizations remain valid. When an employer is reasonably certain the employee’s C11 employment authorization has been terminated, the employer should ask the employee if they have other valid work authorization (which is common). If yes, the employer should then reverify the employee's Form I-9 in Supplement B, with the employee presenting new employment authorization documentation. If an employee is unable to provide new employment authorization documentation, the employer should consider terminating employment. In the event of an Immigration & Customs Enforcement investigation, knowingly to continue to employ a foreign national who is not authorized to work in the U.S. can result in a potential charge. When an employer is uncertain regarding the correct course of action, we recommend speaking to Immigration counsel to review and determine the appropriate steps.

What You Need to Know: Equal Protection Under Title VII: On June 5, 2025, the U.S. Supreme Court unanimously ruled that Title VII’s protections apply equally to all individuals, regardless of whether they are in a majority or minority group, reinforcing a plain-language interpretation of the statute. DEI Implications and Legal Scrutiny: The decision comes amid increasing scrutiny of employer DEI initiatives, highlighting the need for programs to comply with Title VII’s equal treatment requirements for all protected groups. More Changes on the Way? A concurring opinion questions whether the longstanding McDonnell Douglas standard should govern at summary judgment in Title VII cases, possibly foreshadowing more changes to come. In Ames v. Ohio Department of Youth Services, the U.S. Supreme Court unanimously rejected a rule requiring that Title VII discrimination claims brought by “majority-group” plaintiffs meet a heightened evidentiary standard to establish a prima facie case of discrimination. In doing so, the Court held that Title VII applies equally to all groups within its protected classes based on the plain language of the statute that does not differentiate amongst groups. This decision is significant in light of the shifts in the Equal Employment Opportunity Commission’s position on employer diversity, equity, and inclusion (DEI) initiatives. In Ames, a heterosexual woman plaintiff alleged that she was denied a promotion and subsequently demoted due to her sexual orientation. The district court granted summary judgment to the employer on the grounds that the plaintiff failed to meet the Sixth Circuit’s "background circumstances" rule. Plaintiffs who are members of a majority group are required to establish “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.” Multiple other Circuits similarly imposed heightened evidentiary burdens on majority group plaintiffs. The Supreme Court unanimously rejected the background circumstances rule, holding that Title VII's text does not support imposing a heightened standard on majority-group plaintiffs. Justice Ketanji Brown Jackson, delivering the unanimous opinion for the Court, stated that Title VII's protections apply equally to all individuals; they do “not vary based on whether or not the plaintiff is a member of a majority group.” While the decision is not necessarily unexpected, the impact of the Ames decision could be heightened given the recent focus on employer DEI initiatives. In recent guidance finding that employer DEI programs that provide benefits to employees based on race or other protected group status may be unlawful, EEOC has similarly expressed that Title VII’s protections and requirements are equally applicable to all protected groups. Also notable is a concurring opinion issued by Justices Clarence Thomas and Neil Gorsuch. In addition to noting their agreement with the majority, Justices Thomas and Gorsuch questioned the lower court’s use of the McDonnell Douglas burden-shifting standard in awarding summary judgment to the employer. The concurring opinion expressed that requiring employees to meet the McDonnell Douglas standard at the summary judgment stage was an excessive burden, and invited future challenges to the standard’s application. The Ames decision underscores the importance of treating all employees fairly under Title VII. Further, the decision emphasizes the need to assess workplace programs for vulnerabilities in light of the EEOC’s DEI focus. For questions or guidance regarding compliance, please contact Valerie Brown, Jack Blum, Earl Gilbert, or your Polsinelli attorney.

What You Need to Know: OSHA’s Updated SST Plan Targets High-Risk Workplaces Using New Data: The revised Site-Specific Targeting (SST) Inspection Plan now relies on injury data from OSHA’s Injury Tracking Application (ITA), focusing on high-hazard, non-construction establishments with 20+ employees. Key Changes Include More Inspections and Industry Focus: The plan expands the number of inspections and emphasizes industries with high injury rates, while dropping “record-only” inspections for sites mistakenly flagged. Proactive Compliance Strategies Are Essential: Companies should prioritize accurate record-keeping, comprehensive safety training, internal audits and building a strong safety culture to ensure compliance and readiness for surprise inspections. The Occupational Safety and Health Administration (OSHA) has recently updated its Site-Specific Targeting (SST) Inspection Plan, a critical development for companies across various industries. This blog will cover the SST Plan, its recent changes, and practical steps to ensure compliance and readiness for inspections. Site-Specific Targeting Inspection Plan Explained The SST Inspection Plan is OSHA's primary method for targeting high-hazard, non-construction workplaces with 20 or more employees. The Plan uses data from the OSHA Data Initiative (ODI) to identify establishments with high rates of injuries and illnesses. By focusing on these sites, OSHA aims to reduce workplace hazards and improve safety standards. Key Changes in the Updated SST Plan There are three important changes that the updated SST Plan introduces: Data Utilization: The new plan places greater emphasis on data from the OSHA Injury Tracking Application (ITA) to identify establishments for inspection. This shift underscores the importance of maintaining accurate and timely injury and illness records. The SST Plan will select establishments for OSHA inspection based on data from Form 300A for the period 2021 to 2023. Increased Inspections: The updated plan expands the scope of inspections, potentially increasing the number of establishments subject to review. This change highlights the need for companies to be prepared for inspections at any time. But there is some good news: now, if an establishment is targeted in error, OSHA won't continue on with a "record-only" inspection. Rather, it will just leave the premises. Focus on High-Risk Industries: The SST Plan now prioritizes non-construction industries with historically high rates of workplace injuries and illnesses. HR professionals and those involved with safety initiatives in these sectors should be particularly vigilant in ensuring compliance with OSHA standards. Advice for Companies To navigate the updated SST Plan effectively, companies should consider the following strategies: 1. Maintain Accurate Records Accurate record-keeping is as crucial as ever under the new SST Plan. Companies should ensure that all injury and illness records are up-to-date and accurately reflect workplace incidents. This includes regular audits of OSHA 300 logs and ensuring that all required documentation is readily available for inspection. 2. Enhance Safety Training Investing in comprehensive safety training programs is essential. HR professionals should work with safety officers to develop training sessions that address specific workplace hazards and promote safe practices. Regular training not only helps prevent accidents but also demonstrates a company's commitment to safety, which can be beneficial during an OSHA inspection. 3. Conduct Internal Audits Regular internal audits can help identify potential safety issues before they become problems. HR professionals should collaborate with safety teams to conduct thorough inspections of the workplace, ensuring compliance with OSHA standards. These audits can also serve as a valuable tool for preparing for potential OSHA inspections. 4. Foster a Safety Culture Creating a culture of safety within the organization is perhaps the most effective way to ensure compliance with OSHA standards. Companies should encourage open communication about safety concerns and involve employees in safety planning and decision-making. Recognizing and rewarding safe practices can also motivate employees to prioritize safety in their daily activities. The Importance of Compliance Compliance with OSHA's SST Plan is not just about avoiding fines and penalties; it is about ensuring the safety and well-being of employees. By understanding the updated SST Plan and implementing the strategies outlined above, companies can play a pivotal role in creating a safer workplace. What the New SST Inspection Plan Means for Employers The updated SST Inspection Plan represents a significant shift in OSHA's approach to workplace safety. For companies, this means taking proactive steps to ensure compliance and readiness for inspections. By maintaining accurate records, enhancing safety training, conducting internal audits, and fostering a safety culture, companies can not only meet OSHA's requirements but also create a safer, more productive work environment. Polsinelli understands the complexities involved with OSHA compliance and is committed to helping employers meet their obligations efficiently and effectively. If you have questions about OSHA compliance, contact Will Vail, Harry Jones, Shivani Bailey, or your Polsinelli attorney.

Key Takeaways The U.S. Equal Employment Opportunity Commission 2024 EEO-1 Component 1 Report filing opened on May 20, 2025, with a submission deadline of June 24, 2025, and no extensions being granted. Employers must select a workforce snapshot from October 1, 2024, to December 31, 2024. Filing is mandatory for private employers with 100 or more employees, federal contractors with 50 or more employees and certain affiliated private employers. As anticipated, 2024 EEO-1 Component 1 Report filing officially opened May 20, 2025, on the EEO-1 Data Collection website. The EEOC has expressed that, as part of cost savings, the filing period for EEO-1 data will be shorter than in the past. Specifically, employers will have a deadline for submission of June 24, 2025. It is important to note that no extensions will be granted this year, making timely compliance essential. In addition to the shorter time period for submission, there are additional changes to the 2024 EEO-1 reporting as discussed here. Filing Requirements The EEO-1 Report is a mandatory annual data collection that requires certain employers to submit demographic workforce data, including data by race/ethnicity, sex and job categories. The following entities are required to file: Private employers with 100 or more employees; Federal contractors with 50 or more employees; and Private employers with fewer than 100 employees who are affiliated through centralized control or ownership with other entities, totaling 100 or more employees. To complete their report, employers must select a workforce snapshot from any pay period between October 1, 2024, and December 31, 2024, for both full-time and part-time employees. Compliance Assistance Polsinelli understands the complexities involved in the EEO-1 reporting process and are committed to helping employers meet their obligations efficiently and effectively. If you have questions about EEO-1 reporting, contact Erin Schilling, Shivani Bailey or your Polsinelli attorney.

What You Need to Know The U.S. Department of Labor has announced it will no longer enforce the 2024 independent contractor rule under the Fair Labor Standards Act (FLSA), reverting to the more employer-friendly 2008 “economic reality” test. The 2008 Rule and a reinstated 2019 Opinion Letter—favorable to app-based and gig economy businesses—will guide enforcement actions, emphasizing factors like control, investment, and profit/loss potential to determine worker status. While the shift is seen as beneficial to businesses, employers must continue to monitor developments and ensure compliance with federal, state, and local classification standards to avoid misclassification penalties. On May 1, 2025, the Wage and Hour Division of the U.S. Department of Labor (“DOL”) announced that it will no longer enforce its 2024 independent contractor rule under the Fair Labor Standards Act (“FLSA”). The nixed 2024 rule previously set forth a six-factor test to classify workers as employees or independent contractors based on a “totality of the circumstances test” of non-exhaustive factors. The 2024 rule had been subject to numerous legal challenges in district courts across the country because employers considered it to skew towards classifying workers as independent contractors. Now, the DOL will revert back to the framework set out back in 2008 in Fact Sheet #13 (the “2008 Rule”) until it can develop a revised standard. The DOL’s Guiding Independent Contractor Standard (for now) The 2008 Rule asserts that “an employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves.” Under this 2008 Rule, the employer-employee relationship under the FLSA is tested by “economic reality” rather than “technical concepts.” It also states that the following factors are considered significant in determining whether there is an employee or independent contractor relationship: The extent to which the services rendered are an integral part of the principal’s business; The permanency of the relationship; The amount of the alleged contractor’s investment in facilities and equipment; The nature and degree of control by the principal; The alleged contractor’s opportunities for profit and loss; The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor; and The degree of independent business organization and operation. Finally, the 2008 Rule provides that certain factors, such as (i) where work is performed; (ii) the absence of a formal employment agreement; (iii) whether an alleged independent contractor is licensed by a state or local government; and (iv) the time or mode of pay, are immaterial to determining whether there is an employment relationship. Impact of the DOL’s Recent Departure from the 2024 Test The DOL’s announcement does not formally revoke the 2024 rule, but it does indicate that changes to the rule will be forthcoming. The DOL will now utilize the Fact Sheet #13 and a 2019 Opinion Letter (which was previously withdrawn) to conduct audits and other enforcement actions. The 2019 Opinion Letter re-instituted by the DOL on May 2, 2025, addresses whether the workers of a virtual marketplace company that provides an “online and/or smartphone-based referral service that connects service providers to end-market consumers” are independent contractors or employees. In essence, the 2019 Opinion Letter concludes that these “on-demand” workers for virtual marketplace companies, who perform services for users (such as transportation, delivery, shopping, moving, etc.), are independent contractors, not employees. App-based rideshare companies and other similar technology-based service companies will be directly impacted by the DOL’s announcement. While these recent DOL announcements are generally viewed as more employer-friendly, time will tell if that is the practical reality of these changes. Don’t forget – state and local laws can impact the analysis of proper worker classification, so employers need to stay vigilant to ensure they are not making any major changes that would violate those pesky geographic nuances. Employers Should Proactively Monitor This Area Employers should evaluate their existing employee classifications in light of these recent developments to ensure that employees are properly classified to avoid violations of the FLSA’s requirements, including minimum wage, overtime, and recordkeeping. This is particularly important for employers to consider because misclassification issues can be costly. Additionally, employers need to stay alert for any further changes because the DOL has signaled that additional rulemaking regarding independent contractor classification under the FLSA is expected. Please contact your Polsinelli attorney if you have any questions related to this important legal development.

Key Takeaways The 2024 EEO-1 Report is expected to open May 20 pending approval of the instruction book and justification. The EEO-1 is expected to eliminate the option to report non-binary employees. Employers should confirm how their system collects data on the sex of employees to comply with binary-only gender reporting. On April 15, 2025, the Equal Employment Opportunity Commission (EEOC) submitted its 2024 EEO-1 Component 1 Instruction Booklet and justification to the Office of Information and Regulatory Affairs (OIRA), containing potential changes that may impact employers. This booklet indicates that 2024 EEO-1 Component 1 reporting will begin on Tuesday, May 20, 2025, with the deadline to file on Tuesday, June 24, 2025. The 2024 report will cover employee data from the payroll period between October 1, 2024, through December 31, 2024. These reporting dates remain tentative as OIRA must approve the booklet, which can take 30-60 days from the date of submission. Final dates will be posted on the EEO-1 reporting page. Understanding the EEO-1 Reporting Requirements The EEO-1 is an annual requirement that certain employers submit demographic workforce data, including information on race, ethnicity and sex by job group. The EEO-1 report is required for employers with 100 or more employees and employers with less than 100 employees who are related to other entities, such that combined, there are over 100 employees. Changes are Expected to the 2024 EEO-1 Executive Order 14168: Defending Women From Gender Ideology Extremism And Restoring Biological Truth To The Federal Government could have an impact on EEO-1 reporting, particularly concerning the recognition of sex. Executive Order 14168 reinforced the federal government's stance on recognizing only two sexes—male and female. In recent reporting periods, employers were instructed to report non-binary employees by footnote. EEOC is seeking approval to remove the option for employers to voluntarily report on employees who have self-identified as “non-binary” in order to comply with Executive Order 14168. This change would mean that the booklet’s instructions on “Reporting by Sex” would be restated to: “The EEO-1 Component 1 data collection provides only binary options (i.e., male or female) for reporting employee counts by sex, job category, and race or ethnicity.” What Employers Should Do Now? To ensure compliance with the new EEO-1 reporting requirements, employers should review and update their data collection processes. This includes auditing current systems to ensure they can accommodate the reporting of sex as needed. Employers should also stay informed about any updates or clarifications issued by the EEOC regarding the implementation of these changes. Polsinelli will continue to monitor developments with the EEO-1 report. If you have questions about EEO-1 reporting, contact Erin Schilling, Shivani Bailey or your Polsinelli attorney.

Key Takeaways Disparate impact liability holds employers accountable for policies that appear neutral, but disproportionately harm a particular race, sex or a protected group, even without discriminatory intent. This EO significantly reduces federal agency enforcement of disparate impact claims, but importantly, does not impact the risk of a class or individual claim under federal or state laws. Businesses should continue to review hiring and promotion policies for unintentional bias, ensure compliance with federal law and any applicable state laws, and await updated federal guidance from the EEOC. On April 23, 2025, President Trump issued an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy” (“EO”) mandating the elimination of disparate impact liability within Title VI and VII of the Civil Rights Act of 1964. The EO further emphasizes the importance and focus of this administration on the concept of equal employment opportunity. Disparate impact liability is a means by which employers can be held liable for discrimination when their facially neutral policies or practices result in a disproportionate adverse impact on a particular race, sex or a protected class. This theory of liability was recognized by the Supreme Court in 1971 in the case of Griggs v. Duke Power Co., and was later codified by Congress in the Civil Rights Act of 1991. This EO seeks to eliminate the use of this theory of liability to the “maximum degree possible.” To effectuate this goal, the order takes several key steps. First, it revokes several former presidential actions that approved of disparate impact liability. Second, it directs all agencies to deprioritize enforcement of statutes and regulations to the extent that they include disparate impact liability. This order directs the Attorney General to initiate appropriate action to repeal or amend the implementing regulations for Title VI of the Civil Rights Act of 1964 for all agencies to the extent they contemplate disparate-impact liability. In addition, within 30 days of the date of the EO, the Attorney General is to report to the President, in coordination with the chairs of all other agencies, all existing regulations, guidance, rules or orders that impose disparate impact liability and detail steps for their amendment or repeal. This EO also directs the Attorney General and EEOC Chair to assess all pending investigations, civil suits or positions taken in ongoing matters that rely on a theory of disparate impact liability and to take appropriate action consistent with this EO. Further, the Attorney General is to determine whether Federal Authority preempts State laws that impose disparate impact liability. Finally, the EO directs the Attorney General and the EEOC Chair to issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate. Practically, this EO signals a continued shift in enforcement at the EEOC. It seems unlikely the EEOC will bring any new litigation relying on disparate impact. However, a private right of action for disparate impact still exists under the precedent of Griggs and similar cases, allowing employees to bring claims of discrimination relying on a disparate impact theory. Moreover, state laws may also provide for disparate impact liability. Employers should monitor further guidance that is expected to be issued following this EO. If you have any questions about how these changes may impact you or your organization, please feel free to reach out to Erin Schilling, Gabriel Gomez, Polsinelli’s Executive Action Working Group or your regular Polsinelli attorney.

As Polsinelli has discussed, President Donald Trump issued two Executive Orders, No. 14151 and No. 14173 (the “Orders”), targeting DEI (Diversity, Equity and Inclusion) programs and race- or gender-based preferences. The legal landscape surrounding these Orders continues to evolve. The Orders were initially blocked by a District Court in Maryland. However, the U.S. Court of Appeals for the Fourth Circuit reversed and allowed the Orders to remain in effect while the case was resolved on the merits. Accordingly, employers may want to evaluate whether their workplace practices, policies and/or procedures align with these Orders to mitigate potential legal risks. Additionally, employers need to stay mindful of the rights of employees who raise concerns about a business’s DEI initiatives. Employees who report potential perceived violations may be protected from retaliation, even if the Orders are eventually overturned. Employers should respond to whistleblower complaints carefully, documenting actions and maintaining communication with the reporting employee, while ensuring that any adverse employment actions are based on legitimate reasons, not retaliation. Employers should consider reviewing their complaint reporting procedures and consulting legal counsel to ensure compliance with evolving laws, fostering a workplace that supports both legal and business objectives. Read the full update.

On March 14, 2025, President Trump issued an Executive Order rescinding 18 previous orders, including Executive Order 14026, which had raised the minimum wage for federal contractors to $17.75 per hour, higher than both the federal and most state minimum wages. The rescission ends the legal uncertainty around this wage increase, which had been invalidated by the Ninth Circuit but upheld by the Fifth and Tenth Circuits. While the new order does not rescind Executive Order 13658, which set a lower minimum wage, it creates uncertainty about federal contractors' obligations under existing contracts that included the $17.75 wage. Read the full update.

On March 20, 2025, the Equal Employment Opportunity Commission (EEOC) released two key guidance documents focusing on DEI-related discrimination in the workplace. These documents are written as guidance for employees and outline ways the EEOC believes initiatives could lead to unlawful discrimination, including disparate treatment, reverse discrimination, segregation and harassment. The guidance stresses the importance of regular policy reviews, comprehensive training and legal consultation to navigate DEI-related challenges effectively and remain compliant with Title VII protections. Read the full update. 

On March 14, 2025, the Fourth Circuit Court of Appeals allowed the Trump administration to enforce executive orders (EOs) aimed at restricting Diversity, Equity and Inclusion (DEI) programs while litigation continues. These EOs have sparked legal challenges, with the National Association of Diversity Officers in Higher Education arguing they violate constitutional rights. Federal agencies like the Department of Education (DOE), Department of Health and Human Services (HHS) and the Equal Employment Opportunity Commission (EEOC) are actively investigating and issuing guidance to ensure compliance with the new rules, such as prohibiting the use of race in admissions and hiring decisions. Despite this, 14 state Attorneys General have pushed back, asserting that race can still be considered in admissions if it relates to a student’s personal experiences. Organizations, especially federal contractors, should consider carefully reviewing and updating their DEI policies and practices in light of these ongoing legal developments. Read the full update.

Introduction Since President Trump’s inauguration, the administration has underscored its commitment to prioritizing immigration enforcement. This shift includes an increase in U.S. Immigration and Customs Enforcement (“ICE”) raids and the rescission of previous policies that restricted federal immigration authorities from conducting enforcement actions in sensitive locations such as schools, churches and hospitals. Given the new enforcement landscape, it is crucial for employers to be prepared for potential ICE raids or other immigration audits. Preparing for an ICE Raid An ICE raid is an unannounced operation conducted by ICE agents at businesses or homes to apprehend individuals suspected of violating federal immigration law. During a raid, ICE agents may question individuals present and detain or arrest specific persons. However, their authority to search private space is limited without a judicial warrant. Specifically, ICE agents can enter public areas of a business, such as parking lots or lobbies, without restriction. However, they cannot access nonpublic areas without consent or a valid judicial warrant. In contrast, private spaces, such as a private home or office, are not generally accessible to the public and may even have signage indicating that they are intended to be private.  A judicial warrant, issued by a federal or state court and signed by a judge, specifies the search’s scope and location, which may include a private area. Employees must allow access to areas specified in the warrant but can refuse entry to nonpublic areas beyond the warrant’s authorizing scope. In contrast, an administrative warrant, which is not issued by a judge, does not authorize ICE agents to enter private spaces without permission. It directs law enforcement to arrest or detain specific individuals suspected of immigration violations but does not impose a legal duty to comply with ICE demands.  If ICE agents present a warrant, company management should request a copy, verify its type and validity, and proceed accordingly. Legal counsel should be contacted immediately if there is any doubt about the warrant or its validity. It is also important not to interfere with ICE officers or impede their investigation in any way, as obstructing an investigation may result in significant criminal and civil sanctions. To prepare for a potential enforcement action, employees should be trained on how to interact with ICE agents and who to contact if agents arrive. Employees should be counseled on their rights during an enforcement action. Employers should designate a point of contact knowledgeable about employers’ rights and trained to communicate with agents and legal counsel. Nonpublic areas should be clearly marked to delineate private spaces of a business from public areas. Preparing for an I-9 Audit With the heightened focus on immigration enforcement, an increase in I-9 audits and compliance investigations is anticipated. Federal law mandates that employers timely complete an I-9 form for each employee to verify employment eligibility. The Immigration Reform and Control Act of 1986 (“IRCA”) prohibits employing individuals unauthorized to work in the U.S. and requires employers to verify identity and employment authorization. If the federal government initiates an I-9 audit, the employer will receive a notice of inspection (“NOI”) and generally will have three days to produce I-9 forms for review. If ICE determines that certain employees are unauthorized to work, the employer has ten days to provide valid work authorization for the employees, and if the employer is unable to do so the employees will need to be terminated. Affected employees must be notified of the audit findings. To prepare for a potential I-9 audit, employers should ensure the use of the current Form I-9 and confirm all employees have proper work authorization. Conducting an internal audit with legal counsel can help identify non-compliance issues, allow for corrections to the I-9 forms, and demonstrate good faith if an NOI later is issued, which can help limit civil penalties against the employer. Contact legal counsel immediately upon receiving an I-9 NOI for guidance and compliance. Conclusion With the Trump administration’s focus on immigration enforcement, employers must be prepared for potential ICE actions including enforcement raids in their places of business. Polsinelli’s government investigations and immigration teams are available to assist employers in developing response plans and navigating immigration enforcement.

On January 21, 2025, President Trump issued an Executive Order revoking Executive Order 11246, which imposes anti-discrimination and affirmative action requirements on federal government contractors and subcontractors. This action, part of the new administration’s broader assault on DEI efforts in the federal government and private sector, may eliminate a significant compliance obligation for federal contractors. However, much remains uncertain about the going forward status of affirmative action requirements in federal contracting.  The new Executive Order requires the Office of Federal Contract Compliance Programs (OFCCP), which administers Executive Order 11246 among other laws, to immediately cease promoting diversity, stop federal contractors and subcontractors from taking affirmative action and end workforce balancing by federal contractors based on race, color sex, sexual preference, religion or national origin. The Executive Order also states that federal contractors shall not consider race, color, sexual preference, religion or national origin “in ways that violate the Nation’s civil rights laws” when making employment, procurement and contracting decisions. The Executive Order states that federal contractors may continue to comply with the regulatory scheme required by Executive Order 11246 until April 20, 2025. OFCCP did not immediately issue guidance on how the new Executive Order impacts contractors’ obligations. Given that OFCCP’s regulations provide that affirmative action goals are not quotas or set-asides, do not supersede merit selection and do not justify making employment decisions in a discriminatory manner, it is unclear how they conflict or would interact with the Executive Order’s prohibition of illegal discrimination and workplace balancing.  With that said, the now-revoked Executive Order 11246 is the source of those OFCCP regulations and contractor race and gender affirmative action obligations. It does not appear that the Executive Order would affect veteran affirmative action plan obligations under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) or disability affirmative action plan obligations under Section 503 of the Rehabilitation Act, given the statutory basis for those requirements. In addition to eliminating Executive Order 11246, the new Executive Order requires that every federal contract or grant award must now include a term certifying that the contractor or award recipient will not operate any programs promoting DEI that violate federal anti-discrimination laws, and a term requiring compliance “in all respects with all applicable Federal anti-discrimination laws.” The Executive Order states that this term is material to the government’s payment decision. This raises the specter of potential whistleblower actions under the False Claims Act against contractors operating allegedly discriminatory programs. The revocation of Executive Order 11246 underlines the extent to which DEI efforts are in the Trump administration’s crosshairs. On the same day as the new Executive Order, the Office of Personnel Management issued a memorandum immediately suspending with pay all federal employees working in agency DEI offices. As other agencies continue to take actions based upon President Trump’s DEI-related executive orders, companies that do business with the federal government will need to pay close attention. While much remains unclear, the new Executive Order will undoubtedly be a sea of change for federal contractors and subcontractors. Polsinelli is available to assist contractors in navigating the changing landscape surrounding affirmative action and other DEI requirements.

On January 15, 2025, the Supreme Court of the United States issued a unanimous decision in E.M.D. Sales, Inc. v. Carrera, finally clarifying the standard of proof for employers to demonstrate an employee is properly exempt from minimum-wage and overtime-compensation requirements under the Fair Labor Standards Act of 1938 (“FLSA”). Long story short, the Supreme Court has made it crystal clear that FLSA exemptions are subject to the default “preponderance of the evidence” standard, akin to other employment law claims under Title VII. The Court explained that this decision was made, in large part, because: (1) the FLSA does not specify an evidentiary standard (which generally indicates a default preponderance standard); and (2) it does not involve the limited types of claims (e.g., constitutional claims or citizenship removal proceedings) in which the heightened “clear and convincing evidence” standard is warranted. Until the Carrera decision, the Fourth Circuit stood alone as the sole circuit embracing the “clear and convincing” standard of proof for FLSA exemptions. The Carrera decision rectified this discrepancy, making every circuit uniform in this respect. Ultimately, this decision is a win for employers in the Fourth Circuit, because it lowers their evidentiary burden to successfully argue their workers fall within an FLSA exemption. Employers elsewhere should continue doing business as usual. Contact your Polsinelli attorney to inquire whether your workforce is properly classified as exempt under the FLSA or to spot potential areas of risk related to minimum wage or overtime pay issues.

On November 15, 2024, the Office of Federal Contractor Compliance Programs (OFCCP) published its Corporate Scheduling Announcement List (CSAL) online, identifying contractors who will be receiving an audit scheduling letter in the coming year. Contractors were selected based on a variety of considerations, including higher employee count. This CSAL includes 2,000 establishments of supply and service contractors with federal contracts. The list identifies the specific review types that contractors will be subject to, including 1,880 standard establishment reviews, 60 corporate management compliance evaluations, 48 functional affirmative action program reviews, and 12 university reviews. A full copy of the lists can be found here. OFCCP does not make any promises regarding how soon each compliance review will be initiated and has stated it depends on the agency’s workload. Contractors on the CSAL can expect to receive a scheduling letter at any point after the CSAL is posted with some receiving notice quickly and others waiting many months. Contractors will have only 30 days to respond to the scheduling letter once received. Accordingly, the advance notice provided by the CSAL can be a valuable opportunity for contractors to prepare for an upcoming audit, collect the data and documents the contractor will be required to submit to OFCCP within a relatively short period after receipt of the scheduling letter, and identify any potential compliance vulnerabilities that may need to be addressed during the audit process. Contractors named in the CSAL should consider consulting with experienced counsel to assist in preparing for the forthcoming audit scheduling letter and to take advantage of this valuable preparation time. Polsinelli regularly represents federal contractors and subcontractors in OFCCP audits, and is available for consultation with contractors identified in the CSAL. 

On November 13, 2024, the National Labor Relations Board (“NLRB”) issued a sharply divided decision in Amazon.com Services LLC, overruling yet another decades-old rule and holding that captive-‍audience meetings violate national labor law after being lawful since 1948. Captive-Audience Meetings. A captive-audience meeting occurs when employees are required to attend a meeting where the employer expresses its views on unionization. Under Section 8(c) of the National Labor Relations Act (the “Act”), employers are allowed to express those views so long as there is “no threat of reprisal or force or promise of benefit.” In 1948, the NLRB decided in Babcock & Wilcox Co. that the Act generally does not prohibit captive-audience meetings, even when attendance is compelled through implicit or explicit threats of discipline. The New Ruling. Calling the Babcock & Wilcox rule “largely unexplained” and “flawed as a matter of statutory policy,” the NLRB majority overruled the 76-year-old decision and held that captive-audience meetings and “other similar mandatory employer-employee encounters” are unfair labor practices under Section 8(a)(1) of the Act. The majority explained that such meetings “have a reasonable tendency to interfere with and coerce employees in the exercise of their Section 7 right to freely decide whether or not to unionize” when employees should “be free from such domination.” Under this decision, an employer violates the Act whenever it requires employees to attend a meeting for the employer to express its views on unionization, regardless of whether those expressions support or oppose unionization. What Meetings are Allowed? Under the majority’s decision, a voluntary workplace meeting during work hours is lawful if, reasonably in advance of the meeting, the employer provides and follows through with the following assurances to its employees: The employer intends to express its views on unionization at a meeting at which attendance is voluntary; Employees will not be subject to discipline, discharge, or other adverse consequences for failing to attend the meeting or for leaving the meeting; and The employer will not keep records of which employees attend, fail to attend, or leave the meeting. The Dissent. Member Kaplan, in a lengthy dissent, argued that an employer’s right to hold a captive-audience meeting is supported by the free speech provision in Section 8(c) of the Act, that they are not coercive, and that the majority’s decision unconstitutionally infringes on an employer’s right to free speech. To comply with the NLRB’s majority decision, employers should carefully adhere to the above guidelines for voluntary meetings. For questions and assistance regarding such meetings, please contact your Polsinelli attorney.

Employers have been waiting with bated breath on the challenges to the DOL’s newest salary increase for exempt employees scheduled to take effect on January 1, 2025. On November 15, 2024, U.S. District Court Judge Sean Jordan for the Eastern District of Texas granted summary judgement in Texas v. Dept. of Labor striking down the DOL’s April 2024 rule. As a brief recap, in late April 2024, the DOL proposed two increases to the minimum salary threshold for the FLSA’s executive, administrative, and professional exemptions (known as the White Collar Exemptions). At the time of the new rule, the salary threshold was set at $684 per week, or $35,568 per year. The rule made the first increase starting July 1, 2024, of $844 per week ($43,888 annually), and the second increase starting on January 1, 2025, of $1,128 per week ($58,656 annually). While there were several challenges before the July 1, 2024 increase, three courts that had challenges before them did not issue injunctive relief to prevent that increase from going into effect. In his order, Judge Jordan found that the DOL’s rule exceeded its authority. Specifically, Judge Jordan found that while the DOL can use salary as a part of its authority to define the requirements of the White Collar Exemptions, the salary test “is not included in the statutory text,” and is “not unbounded.” He stated that the salary threshold cannot “displace” the duties tests for each of the White Collar Exemptions. In using the 2024 U.S. Supreme Court case Loper Bright Enterprises v. Raimondo in his reasoning, Judge Jordan examined the impact of the salary threshold increases compared to prior adjustments, specifically the latest increase in 2019. Judge Jordan found that the new salary increases did not just screen out those employees who were clearly non-exempt, but also resulted in disqualifying significant portions of employees who would otherwise meet the applicable duties tests. For example, the Judge calculated that the July 2024 increase alone resulted in a third of prior exempt employees being disqualified from the exemption. “When a third of otherwise exempt employees who the Department acknowledges meet the duties test are nonetheless rendered nonexempt because of an atextual proxy characteristic – the increased salary level – something has gone seriously awry.” Judge Jordan’s ruling completely strikes the April 2024 rule on a nationwide basis – including the increases that occurred on July 1, 2024. Thus, the salary threshold is reverted back to the $684 weekly ($35,568 annually) amount. The DOL can appeal the decision, but with the upcoming change in administration, it is uncertain what the DOL’s next step will be.

On November 8, 2024, the National Labor Relations Board (“NLRB”) issued a decision in Siren Retail Corp. d/b/a Starbucks, throwing out an almost 40-year-old rule that categorically allowed employers to tell their employees how unionization will impact the employer-employee relationship. The NLRB’s new standard will apply to cases filed after November 8, 2024. The Prior Standard. In 1985, the NLRB decided in Tri-Cast, Inc. that employers may lawfully tell their employees that, when they unionize, their relationship will change, and the employer will no longer be able to address individual grievances once the union is involved. Since that time, Tri-Cast, Inc. has been broadly applied as a categorical rule that explaining the negative consequences of unionization is not an unlawful threat, so long as the employer’s statements are truthful. The Starbucks Case. In Siren Retail Corp., the NLRB criticized the Tri-Cast, Inc. standard because it “categorically immunized nearly any employer statement to employees touching on the impact that unionization would have on the relationship between individual employees and their employer” when such statements “could have a reasonable tendency to coerce employees.” Although the NLRB kept the Tri-Cast, Inc. standard for the Siren Retail Corp. case to avoid an unfair result, it prospectively overruled Tri-Cast, Inc. for all cases filed after November 8, 2024. The “New” Standard. The NLRB’s decision in Siren Retail Corp. effectively tosses out the Tri-Cast, Inc. standard in favor of returning to an even older approach set forth in NLRB v. Gissel Packing Co., a case decided by the United States Supreme Court in 1969. Under the Gissel rule, an employer’s statements concerning the potential impact of unionization are evaluated on a case-by-case basis and must be “carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control.” But if, under that case’s circumstances, the statement implies that the employer will act differently “solely on his own initiative for reasons unrelated to economic necessities,” then the statement will be considered an unlawful threat. What Should Employers Do Now? The “new” standard requires an employer’s statements to be not only substantiated with facts beyond the employer’s control but also carefully worded. Because it involves a case-by-case analysis, employers will not have certainty about the risks and legality of their communications. As such, it will be critical for employers to vet communications to employees about unionization efforts with experienced counsel. For questions and assistance regarding your statements to employees and how to comply with this new standard, please contact your Polsinelli attorney.

On October 29, 2024, the Office of Contract Compliance Programs (“OFCCP”) published a notice in the Federal Register about a request for Type 2 Consolidated EEO-1 Reports (the “Consolidated Reports”) for 2021. (The request is also for 2022 reports, but OFCCP does not currently have those reports.) This request has been made by the University of Utah and a non-profit organization named “As You Sow” – and is separate from the 2022 request made by the Center for Investigative Reporting, which sought the same reports for 2016-2020. An appeal of the proposed release of the objected-to data remains pending in the Ninth Circuit. The Consolidated Reports contain demographic data for all employees at headquarters as well as all establishments, categorized by race/ethnicity, sex, and job category. With the publication of the Notice by OFCCP, government contractors now have until December 9, 2024, to object to the release of this sensitive data. If contractors miss that deadline, their data could be automatically released. The OFCCP has provided a list of contractors subject to this request.  As occurred with the prior FOIA request for Consolidated Reports, contractors must submit their objections to the release of the data to OFCCP through the OFCCP’s Submitter Notice Response Portal (or certain other specified means). The portal provides specific questions for contractors to answer, which address whether the Consolidated Reports and their data should be withheld pursuant to FOIA Exemption 4, which specifically addresses the withholding of trade secret or commercial or financial information. The OFCCP has provided FAQs to aid contractors in determining whether they are covered by the request and how to object, as well as providing contact information for reaching out to the OFCCP FOIA Help Desk. If a contractor submits an objection, OFCCP will independently evaluate the objections and make a determination regarding withholding the Consolidated Reports under Exemption 4. Both the objector and the requesting entities will receive notice of a determination to withhold data. Accordingly, if there is data in your Consolidated Reports that you don’t want published or accessible to competitors, act quickly to submit objections prior to the December 9th deadline. Otherwise, you should expect that your report’s data may be provided to an entity who will make it public. For questions or assistance in evaluating whether you should file an objection to the FOIA request, or in preparing an objection, please contact your Polsinelli attorney.

This past week, the FTC appealed a Texas federal court’s August ruling that blocked nationwide enforcement of the non-compete ban. The non-compete ban will remain blocked during the pendency of the appeal process. However, the outcome of the appeal will determine: (1) whether the non-compete ban remains blocked; and (2) the future scope of the FTC’s regulatory authority. There are three court challenges to the non-compete ban. The status of those challenges (including appeals) is detailed below: Ryan v. The Federal Trade Commission: On October 18, 2024, the FTC filed a Notice of Appeal to challenge a Texas federal court’s seminal ruling, which held the non-compete ban unlawful and blocked—nationwide—the FTC’s non-compete ban from taking effect on September 4, 2024. Pending the appeal, the non-compete ban remains enjoined. The rule will now be considered by the Fifth Circuit. It is likely the issue will be appealed to the U.S. Supreme Court for review. Properties of the Villages, Inc. v. Federal Trade Commission: In August 2024, a Florida federal court entered a limited injunction prohibiting enforcement of the non-compete ban against the named plaintiff. In late September 2024, the FTC filed a Notice of Appeal. The rule will now be considered by the Eleventh Circuit. If there is a circuit split in the U.S. Courts of Appeals, that could create uncertainty in the business community. A circuit split on an issue of national importance, such as this, would also increase the high probability that the U.S. Supreme Court would entertain an appeal and weigh in itself. ATS Tree Services, LLC v. Federal Trade Commission: As the appeals of the Ryan and Villages cases progress, one challenge to the non-compete ban will not be moving forward. In July 2024, a Pennsylvania federal court upheld the legality of the FTC’s non-compete ban. Following that ruling, the Court refused to issue a stay pending the appeal in Villages and the then-anticipated Ryan appeal, prompting the plaintiff to abandon its challenge to the non-compete ban and dismiss the case. Evaluating the potential impact of FTC leadership change: Another consideration for the non-compete ban’s legal battle is the fate of FTC Chair Lina Khan’s tenure. Her three-year term expired in late September, but she may remain on the job as acting chair until or if she’s replaced. Depending on the outcome of the Presidential and Congressional elections, the FTC could come under new leadership at which time the non-compete ban could be rescinded and/or the appeals dropped. What comes next? As the appeal process unfolds, the non-compete ban remains blocked vis-à-vis the Ryan court’s ruling. Polsinelli attorneys will continue to monitor the status of the appeals.

On September 11, 2024, the U.S. Court of Appeals for the Fifth Circuit in Mayfield v. U.S. Department of Labor confirmed that the United States Department of Labor (“DOL”) has the authority to use a salary basis to define its white-collar overtime exemptions. This is a significant win for the DOL as it is presently defending its latest increase to the minimum salary thresholds for executive, administrative, and professional exemptions under the Fair Labor Standards Act (“FLSA”), also known as the FLSA’s “white-collar exemptions," in litigation pending in the U.S. District Courts for the Eastern and Northern Districts of Texas. The Mayfield Decision In Mayfield, a unanimous three-judge panel of the Fifth Circuit provided that the DOL has the authority to "define and delimit" an exemption from overtime pay under the FLSA. In so ruling, the Court affirmed the dismissal of a lawsuit initiated by a Texas fast-food operator, Robert Mayfield, who claimed Congress never authorized the DOL to use salaries as a test for whether workers have managerial duties. The Court rejected Mayfield’s argument. In response, the Fifth Circuit wrote that "[d]istinctions based on salary level are... consistent with the FLSA’s broader structure, which sets out a series of salary protections for workers that common sense indicates are unnecessary for highly paid employees.” Upon issuing the Mayfield decision, the Fifth Circuit joined the four other federal appeals courts that have considered this issue previously (including the D.C. Circuit, Second Circuit, Sixth Circuit, and the Tenth Circuit). 2024 DOL Rule The 2024 DOL rule effectively focused on three main points. First, it raised the minimum weekly salary to qualify for the FLSA’s white-collar exemptions from $684 per week to $844 per week (equivalent to a $43,888 annual salary) on July 1, 2024. Second, it called for another increase of the minimum weekly salary to $1,128 per week (equivalent of a $58,656 annual salary) on January 1, 2025. Third, under the 2024 DOL rule, the above salary threshold would increase every three years based on recent wage data. As mentioned above, the Mayfield decision comes at a time when the DOL is defending its recent 2024 rule increasing the salary thresholds for white-collar exemptions in both the Eastern and Northern Districts of Texas. Indeed, the Mayfield decision’s timing could not have come at a more opportune time for the DOL because it supplies these Texas federal judges with new direction from the Fifth Circuit to consider when making their rulings. What Does This Mean for Employers? The Mayfield decision bolsters the DOL in its bid to set and increase the minimum salary requirements for its white-collar overtime exemptions, which will certainly pose challenges for employers in creating compliant employee compensation structures. In short, if the 2024 DOL rule goes into effect, employers will have to substantially raise their employees’ salaries to ensure they remain properly exempt from the overtime provisions of the FLSA. Contact your Polsinelli attorney if you have any questions related to wage and hour matters or compliance with the FLSA in light of these recent developments.

In April, the U.S. Supreme Court unanimously held in Muldrow v. City of St. Louis, that to sustain a prima facie case of employment discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”), plaintiffs do not have to show that a discriminatory transfer to another position caused “material” or “significant” harm to the plaintiff; rather plaintiffs only have to show that “some” harm occurred because of the job transfer. In its opinion, the Court did not explicitly articulate how “some” harm is defined. Regardless, the reduced “harm” standard will invariably increase the number of claims that survive early dismissal at the trial court level. Indeed, Justice Kavanaugh opined that a plaintiff “should easily be able to show some additional harm – whether in money, time, satisfaction, schedule, convenience, commuting costs or time, prestige, status, career prospects, interest level, perks, professional relationships, networking opportunities, effects on family obligations, or the like.” Pre-Muldrow, federal circuits disagreed on how much harm a plaintiff must show to have suffered an actionable “adverse employment action” under Title VII. Some circuits previously held that no showing of harm necessary beyond the discriminatory act itself was required, while other circuits generally applied a heightened standard of harm for claims to be actionable under Title VII. Post-Muldrow, employers will be forced to grapple with a lowered, undefined standard of “harm,” which will likely require additional litigation to sort out. Further, while the Court’s holding was focused on job transfers, the decision might encourage employees to challenge other types of employment actions, (i.e., scheduling changes, work assignments, training and mentorship, or other opportunities) in an attempt to lower the legal standards for actionable discrimination claims altogether. However, it is not time to panic (yet). Employers still have the well-known defense in their arsenal that the job transfer was made for legitimate, non-discriminatory reasons. As such, thorough documentation for the reasons supporting an employee’s job transfer have just become even more critical to shield employers from increased discrimination claims under Title VII. Contact your Polsinelli attorney to ensure your policies, programs, and employment decisions are structured to mitigate increased risk surrounding the new Muldrow job transfer standard.

On June 7, 2024, the Office of Federal Contract Compliance Programs (OFCCP) released its first Corporate Scheduling Announcement List (CSAL) for fiscal year 2024. Specifically, this list identifies around 500 federal supply and service contractors and subcontractors that will be audited. The CSAL can be found here and the OFCCP answers to CSAL-related questions can be found here. Of the 500 contractors and subcontractors identified, 440 are establishment-based reviews, 30 are corporate management compliance evaluations (CMCE) focused on the contractor’s headquarters, 24 are functional affirmative action plan (FAAP) reviews, and 6 are university reviews. The release of the CSAL does not indicate that audits are beginning but rather, informs contractors and subcontractors that they have been identified for audit. This allows contractors and subcontractors advance notice and can be very helpful in providing time to prepare for the audit, gather data and documents necessary for the audit, and identify any potential issues that may need to be addressed before or during the audit. Before formally initiating an audit, OFCCP sends contractors and subcontractors a Scheduling Letter. Scheduling Letters are often issued around 45 days after the CSAL is released, and as such, it can be difficult and rushed for contractors and subcontractors to prepare for the audit. Polsinelli regularly represents federal contractors and subcontractors in OFCCP audits and is available for consultation with contractors and subcontractors identified in the CSAL.

Tuesday, June 4, 2024, is the deadline to submit and certify the 2023 EEO-1 Component 1 Report to the Equal Employment Opportunity Commission (EEOC). While the deadline has been extended occasionally in prior years, no such announcement has been made to date. Accordingly, all covered employers should take steps to comply by the deadline. The importance of meeting this annual reporting requirement was further emphasized this week when the EEOC filed suit against 15 employers in various industries across 10 states for failing to submit their EEO-1 Component 1 Reports for past years, including for the years 2021 and 2022. Additional information regarding reporting requirements and whether your company is required to submit and certify can be found here. Polsinelli will continue to monitor developments with EEO-1 reporting and the above-referenced EEOC lawsuits. If you have questions about EEO-1 reporting or need assistance preparing this report, contact your Polsinelli attorney.

Yesterday (May 29), in Ryan, LLC et al. v. The Federal Trade Commission, the FTC filed its response in opposition to Plaintiffs’ request to stay/enjoin the FTC Rule banning non-competes from taking effect on September 4. The Court has committed to issuing a decision on Plaintiffs’ request no later than July 3. Consistent with commentary to the Rule, the main thrust of the FTC’s response argues it has authority to issue the Rule pursuant to the Federal Trade Commission Act’s directive that Congress “empowered and directed” the FTC to prevent the use of unfair methods of competition through rulemaking. The FTC also devotes significant briefing to dispelling the application of the “major questions doctrine” to curtail its regulatory ability. We anticipate the Court’s decision will most likely hinge on whether the Court applies the major questions doctrine – articulated in the U.S. Supreme Court’s 2022 decision in West Virginia v. Environmental Protection Agency – to grant a nationwide injunction enjoining the Rule. In the West Virginia decision, the Supreme Court found the EPA’s policy involved a “major question” and that the agency went too far in its attempt to regulate absent explicit permission from Congress to do so. The U.S. Court of Appeals for the Fifth Circuit employed that same rationale to affirm a preliminary injunction blocking enforcement of President Biden’s COVID-19 federal contractor vaccine mandate. The Fifth Circuit’s decision likely drove the filing of the two lawsuits challenging the Rule in Texas federal courts, which sit in the Fifth Circuit. Plaintiffs' reply briefs are due June 12. Your Polsinelli Restrictive Covenant and Trade Secret Group will continue to monitor these cases and will keep you updated with any major litigation developments.

On April 29, 2024, the Equal Employment Opportunity Commission (“EEOC”) issued final guidance on workplace harassment. The guidance is effective immediately and is the first time the EEOC has updated its workplace harassment guidance since 1999. It reflects changes in the law in the last two decades, including making clear that federal law prohibits discrimination on the basis of sexual orientation and gender identity. The guidance provides an overview of anti-harassment laws but does not change legal requirements currently applicable to employers. While the guidance is not law and not binding on a court, it is intended to serve as a resource for employers, employees, and others, and provides insight into how the EEOC views various topics related to workplace harassment. Employers should review the guidance because it provides 75+ examples, as well as other information, that can be helpful in understanding the nuances of anti-harassment laws. For example, the guidance notes that “[n]ot all harassing conduct violates the law, even if it is because of a legally protected characteristic,” and it provides several examples of unlawful harassment. The guidance also covers topics such as establishing causation, hostile work environment, liability for harassment claims, and remote work. If you have any questions about workplace harassment, contact your Polsinelli attorney.

On April 23, 2024, the Federal Trade Commission (“FTC”) conducted a special Open Commission Meeting to vote on a Final Rule (the “Rule”) banning most non-compete clauses as an “unfair method of competition.” By a vote of 3-2, the Rule was approved for publication in the Federal Register. The Rule becomes effective 120 Days from Publication in the Federal Register (the “Effective Date”). Here is what you need to know: What clauses are impacted by the Rule? The Rule defines a prohibited “non-compete clause” to include any contract term, workplace policy, or term or condition of employment, written or oral, that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from seeking work, accepting work, or operating a business after prior employment ends. Other types of post-employment covenants (e.g., non-solicitation) could be attacked under the Rule if they have the effect of a non-compete. What employers and workers are impacted by the Rule? Generally, the Rule will impact all employers other than certain banks, savings and loan companies, non-profits, and common carriers, which are not subject to the FTC’s authority by law. The Rule applies to paid and unpaid workers, including employees, independent contractors, externs, interns, volunteers, apprentices, and sole proprietors. The Rule does not apply to the franchisee in a franchisor relationship. What conduct is prohibited by the Rule? The Rule prohibits employers from (1) entering into or attempting to enter into a non-compete clause, (2) enforcing or attempting to enforce a non-compete clause, and (3) representing that a worker is subject to a non-compete clause. The Rule applies to non-compete clauses entered before the Effective Date unless the non-compete clause is with a “Senior Executive”. The exception for “Senior Executives”: Unlike the proposed rule, the final version of the Rule provides an exception for non-compete clauses entered into with Senior Executives before the Effective Date. A Senior Executive means a worker receiving total annual compensation (excluding fringe benefits) of at least $151,164 in the preceding year, and was “in a policy-making position”—meaning the entity’s president, CEO, officer, or other person who has final authority to make policy decisions that control significant aspects of the entity (and not just a subsidiary or affiliate). The exception for “bona fide sales of business”: The Rule does not apply to non-compete clauses entered into “pursuant to a bona fide sale of a business entity, of the person’s ownership interest in a business entity, or of all or substantially all of a business entity’s operating assets.” The Rule does not limit this exception to only those holding at least 25% ownership interest in a business, like the proposed rule did. What does the Rule require employers to do now? On or before the Effective Date (unless the Rule is enjoined), employers are required to provide all workers with impacted non-compete clauses clear and conspicuous notice to the worker that the non-compete clause will not be, and cannot be, legally enforced against the worker. The notice must be provided in writing by hand deliver, mail, email or text message, and group communications are permissible. The Rule provides model notice language. What happens to existing lawsuits? The Rule does not apply to causes of action related to non-compete clauses that have accrued prior to the Effective Date. Put another way, the Rule likely will not change cases involving alleged violations of non-compete clauses occurring before the Effective Date. What do we expect next? Lawsuits challenging the Rule were filed within hours of the vote, including a lawsuit filed in the United States District Court for the Eastern District of Texas by the U.S. Chamber of Commerce. Given the scope of the Rule and its impact, it is anticipated that at least some courts will enjoin the Rule from taking effect until the U.S. Supreme Court has an opportunity to weigh in on the Rule’s validity and constitutionality. Is there still risk when hiring a competitor’s employees? Yes. The Rule does not take effect for months and may never take effect if the court challenges are successful. The Rule also does not apply to conduct occurring before the Effective Date, so actions taken now still have risk. More importantly, the Rule generally does not eliminate all risk to hiring employees from a competitor because even without non-compete clauses, employers can bring suit based on other contract terms (non-solicitation and non-disclosure clauses), trade secrets, and legal theories to protect their interests when former employees go to work for a competitors. Contact your Polsinelli attorney if you need guidance reviewing your non-compete agreements or strategy around restrictive covenants.

As has been expected, and as we addressed at the end of 2023 in our previous blog post, on April 23, the U.S. Department of Labor (“DOL”) at long last issued its final rule raising the salary thresholds for overtime exemptions. The rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees,” addresses the scope of the carveout for positions deemed to be exempt from the overtime requirements of the Fair Labor Standards Act (“FLSA”). Specifically, the final rule sets into motion increases in the salary threshold that must be met for a position even to be potentially exempt. The salary thresholds are higher in the final rule than they were in the proposed rule. Beginning July 1, 2024, the salary threshold will increase to $43,888/year from the current level of $35,568/year. Following that, the threshold level will increase to $58,656/year on January 1, 2025. The January 2025 level equates to $1,128/week. The DOL has said that the increased threshold beginning January 1, 2025, will affect some 3 million workers. In addition to the general salary exemption thresholds, the rule will raise the threshold for classification as a highly compensated employee, from the current $107,432 to $132,964 in July 2024 and then to $151,164 in January 2025. This will not be the last increase – the rule sets forth that automatic updates to the threshold amounts will take place every three years based on the latest earnings data. As has been the case with previous attempts at increases through DOL rules, we anticipate there will be challenges to the rule. Finally, the rule will not alter the duties necessary for the exemption qualification of a position. And employers should remember that some states have higher salary thresholds for exemption under their state wage-and hour laws. Contact your Polsinelli attorney for further guidance regarding this rule change and other wage-and-hour matters.

FTC Final Rules Banning Non-Competes Vote Next Tuesday As you know, last year, the FTC issued a proposed rule banning virtually all non-compete agreements (which does not include non-solicitation agreements, confidentiality agreements and the like). Yesterday, the FTC announced that a special Open Commission Meeting will be held virtually on Tuesday, April 23, 2024, at 2 p.m. EDT at which time the FTC is expected to vote on a Final Rule. Here is what you need to know for now: When is the vote on the Final Rule to ban non-competes? Tuesday, April 23, 2024 at 2 p.m. EDT. The Open Commission Meeting will be available to view here.  What is expected to happen? The consensus among Polsinelli’s Restrictive Covenant and Trade Secret Practice Group, other experts, and scholars is that the FTC will vote to implement a Final Rule substantially similar to the Proposed Rule. In short, that means that it will vote to ban essentially all non-competes with limited exceptions (some form of ownership in the entity being sold – the Proposed Rule had a 25% threshold). When will the Final Rule be effective? The Final Rule is expected to become effective 60 days after publication in the Federal Register. (The FTC has the ability to implement the Final Rule sooner if necessary due to an “emergency situation” but we do not anticipate that in this instance.) What can you do now? Understand that the vote will be Tuesday; that does not mean the Rule will be effective Tuesday. Understand that the Rule likely will not be effective until 60 days after publication in the Federal Register and that we anticipate that there will be litigation seeking to block the Rule from going into effect, as discussed below. Evaluate your use of non-competes, and develop strategies for navigating the uncertainties of the time. Strategically and thoroughly analyze your trade secret protocols and protections. What do we expect next? Experts and scholars (and we) fully expect the Final Rule will be challenged in Federal Court with the challenging parties seeking immediate injunctive relief preventing implementation of the Final Rule, based upon the FTC exceeding its authority. Contact your Polsinelli attorney if you need guidance reviewing your non-compete agreements or strategy around restrictive covenants.

The Office of Federal Contract Compliance Programs (OFCCP) announced that the Contractor Portal for federal contractors and subcontractors to certify compliance with their affirmative action plan (AAP) obligations will open on April 1, 2024, with contractors and subcontractors having until July 1, 2024, to submit the required certification. This is the third year of OFCCP’s annual certification requirement. Contractors must again certify that they have developed and maintained annual affirmative action plans for each of their workplace establishments or functional/business units, as applicable.  Beginning last year, contractors and subcontractors were required to enter the start date of their currently maintained AAP. For the current 2024 certification period, contractors are certifying compliance for its most recent AAP start date.  In addition, covered federal contractors must disclose the number of employees which are included in each establishment AAP.  OFCCP continues to stress the need to meet this reporting deadline. The agency has indicated that contractors who fail to certify compliance (due to either failing to complete the certification or stating in the certification they have not complied) “will be more likely to appear on OFCCP’s scheduling list” for annual compliance audits. The certification requirement applies to existing federal contractors. OFCCP encourages new contractors to register as soon as possible after entering a contract and then update certification within 90 days of developing their AAP. Polsinelli assists many federal contractors and subcontractors in completing the Contractor Portal certification requirement and assists many entities doing business (directly or indirectly) with the federal government in determining whether they are subject to AAP obligations. Polsinelli’s OFCCP & Affirmative Action Plans practice is available to provide practical assistance to contractors and subcontractors with the certification process.

On Tuesday, April 30, 2024, the Equal Employment Opportunity Commission (EEOC) will open the 2023 EEO-1 Component 1 Report for employers to report the race, ethnicity and gender of their employees. The EEO-1 reporting period is scheduled to remain open until Tuesday, June 4, 2024. This reporting is mandatory for private sector employees with 100 or more employees and certain federal contractors with 50 or more employees. In addition, employers with less than 100 employees who are related to other entities, such that combined, there are over 100 employees, may also be required to file. The EEOC anticipates posting updates regarding the 2023 EEO-1 Component 1 data collection by Tuesday, March 19, 2024, including the 2023 EEO-1 Component 1 Instruction Booklet and the 2023 EEO-1 Component 1 Data File Upload Specifications. Polsinelli will continue to monitor developments with the EEO-1 report. If you have questions about EEO-1 reporting or need assistance preparing this report, contact your Polsinelli attorney.

On January 31, 2024, several U.S. government agencies released proposals and guidance aimed at imposing new pay transparency and salary history requirements upon federal government contractors and subcontractors. These proposals, should they go into effect, will subject federal contractors and contractors to a suite of pay equity regulations mirroring those recently enacted in progressive states like California and New York. Proposed FAR Clause Implementing Salary History Restrictions Most significantly, the FAR Council, which consists of the Administrator for Federal Procurement Policy and the heads of the Defense Department, NASA, and the General Services Administration, published a proposal to amend the Federal Acquisition Regulation (FAR) to implement a new pay equity clause. Under the new proposal, the new clause would be applicable to the bulk of federal government contracts that are performed in the United States and its outlying areas, and will also flow down to subcontractors at any tier.  The proposed clause applies to recruitment for any position that works “on or in connection with” a federal contract – an established standard covering not just the employees who perform the direct services called for under the contract, but also support services that are necessary for the contract’s performance. The proposed FAR clause prohibits several actions in connection with an employer’s use of an applicant’s prior compensation level in past positions during the recruiting process: Contractors cannot seek an applicant’s compensation history from the applicant or the applicant’s former employer, or require the applicant to disclose compensation history. Contractors cannot retaliate against or refuse to interview or hire applicants who do not respond to an inquiry about compensation history. Contractors cannot rely on an applicant’s compensation history (if known or discovered) as criteria for screening applications or in determining the applicant’s new compensation upon hire. Notably, the prohibition on using prior compensation in setting an applicant’s new compensation applies even if the applicant voluntarily discloses their compensation in pay negotiations. The proposed clause would also impose compensation disclosure requirements for contractors’ job advertisements. The clause requires that all advertisements for positions that work on or in connection with a federal contract must disclose the range of salary or wages the contractor believes in good faith that it will pay for the position. Job listings must also disclose a “general description” of benefits and other types of compensation (i.e., commissions, bonuses, etc…) offered. If more than 50% of compensation will come from non-wage or salary compensation, then the contractor must specify the percentage of overall compensation or dollar amount of each other form of compensation. Job advertisements must also include a notice of rights under the new FAR clause and information about how to submit claims of discrimination. New OFCCP Guidance on Salary History Concurrently with the proposed FAR clause, the Office of Federal Contract Compliance Programs (OFCCP) issued Frequently Asked Questions guidance about the use of salary history in setting compensation. The guidance does not, at least directly, impose new obligations on contractors, but does suggest that OFCCP will view an employer’s use of salary history in setting compensation as a potential indicia of pay discrimination. OFCCP’s guidance does not explicitly take the position that contractors may not use or rely upon salary history in setting compensation. Rather, the guidance states that “the practice may contribute to unlawful discrimination, depending on the specific facts and circumstances at issue.” The guidance also does not treat the use of salary history data voluntarily provided by an applicant in negotiations as different from information collected or required to be provided by the employer. The guidance suggests that the use of salary history by a contractor may be reviewed by OFCCP in compliance evaluations as part of its examination of the employer’s broader compensation policies. The FAR Council is accepting comments on its proposed rule until April 1, 2024, which could lead to changes in its scope prior to implementation. Still, federal contractors and subcontractors should review their compensation and recruiting practices to identify whether salary history data is collected and how it is used in setting compensation, as even absent these proposals, the use of salary history in setting compensation is a potential vulnerability that may expose an employer to equal pay claims.

On January 9, 2024, Shareholders in our Restrictive Covenant and Trade Secret Practice Group conducted a webinar covering “What Employers Need to Know About Non-Competes in 2024.” A recording of that webinar is available here. Below, the Team addresses some of the additional questions concerning the status of the FTC Proposed Rule, anticipated challenges to the Proposed Rule, FTC Lawsuits Against Employers for Imposing Non-Competes, Exceptions to Non-Compete Bans, Employee “Theft,” and Hiring Employees Subject to Non-Competes that were posed during the webinar. 1. The Status of the FTC Proposed Rule Banning Non-Competes The comment period ended on April 19, 2023, and we are now waiting on the FTC to issue a Final Rule. There is no deadline for the FTC to issue a Final Rule, though the general consensus is that the FTC will issue a Final Rule in April 2024. No one knows with certainty what the Final Rule will say, and the FTC is not restricted by the proposed rule or comments. It can adopt the proposed rule as is, modify, or even implement an entirely different rule without any additional rulemaking process. The FTC’s advocacy for a full ban since the comment period closed suggests it does not intend to change course, and employers would be wise to prepare for a Final Rule substantially similar to the proposed one. 2. Anticipated Challenges to the FTC Final Rule Regardless of what the Final Rule looks like, it will be immediately challenged in court (similar to the vaccine mandate challenges), with the Final Rule taking effect unless and until it is enjoined. The prevailing opinion is that there are very strong arguments to attack the FTC’s authority to issue the rule, primarily that the FTC exceeded its rule-making authority. Regardless of the ultimate success of the legal challenges, it will still generate uncertainty in the interim and give rise to public policy arguments against enforcement in current disputes (which some judges may find persuasive). Moreover, the rulemaking effort is merely another example of growing hostility towards non-compete covenants, and we will likely see Congress and states, including New York, revisit this issue. 3. FTC Lawsuits Against Employers for Imposing Non-Competes During 2023, even without the authority of a Final Rule, the FTC filed three complaints against employers over their use of non-competes. The claims alleged the employers imposed non-competes on employees in an unfair manner that tended to harm competition, consumers, and workers, thus violating antitrust laws. The Complaints were unrelated to any enforcement efforts by the employers at issue, but the FTC argued that the noncompetition agreements at issue had the effect of prohibiting workers in the affected industries from earning higher wages and were therefore unfair labor practices. This ties into the cooperation agreements entered into between the FTC, the NLRA and DOL in 2023, which make it more likely that employers’ non-competes may come under scrutiny as a result of an unrelated audit or investigation. 4. Exceptions to Non-Compete Bans in the Proposed Final Rule The FTC Proposed Rule is very broad and applies to all kinds of paid and unpaid workers, while some state laws are more narrow (bans for employees only) or are less clear in whether they are intended to apply to other categories of workers beyond employees. Similarly, the FTC Proposed Rule did not contain a carve out for highly compensated workers. Other state laws, like Illinois, Colorado, Maryland, Maine, Nevada, Oregon, Rhode Island, Virginia, Washington and Washington D.C., allow for non-competes if an employee makes above a certain salary threshold. It is best practice to evaluate each case based on its facts and review the applicable law, since there is no one-size-fits-all approach to non-compete guidance at this time. 5. Employee “Theft” Most of the laws voiding non-competes do not impact the enforceability of non-solicitation clauses, though some do (e.g., Colorado and Illinois). However, with the federal government’s recent focus on antitrust, non-solicitation clauses purporting to prohibit the hiring of employees by a competitor or business partner may come under closer scrutiny. Employers should be wary of any agreement that could be interpreted as restricting the ability to hire employees. 6. Hiring Employees Subject to Non-Competes Even with the changes in the law, hiring employees subject to non-competes can still be risky. Generally, non-competes are not per se invalid, and lawsuits to enforce non-competes can be made even if the covenant in question is likely to ultimately be found overbroad or unenforceable. Unfortunately, the path to proving a non-compete is unenforceable in court, and arbitration is disruptive, time-consuming and expensive. Polsinelli attorneys are available to help you evaluate the facts of each particular situation on a case-by-case basis to develop a risk management strategy for hiring and retaining employees.

Late last year, the EEOC quietly announced its most recent Strategic Enforcement Plan, covering 2024–2028. To no surprise, the EEOC has indicated that it will implement a concerted effort to focus its resources on employment practices that often result in class and collective action lawsuits. More specifically, the EEOC announced the following “subject matter priorities” for the next four years: “Eliminating Barriers in Recruitment and Hiring” (including use of artificial intelligence for hiring, apprenticeship/internship programs, online-focused application processes, screening tools for hiring—such as pre-employment tests and background checks, and the underrepresentation of women and workers of color in industries such as manufacturing, tech, STEM, and finance, for example); “Protecting Vulnerable Workers and Persons from Underserved Communities from Employment Discrimination” (including immigrant workers, persons with mental or developmental disabilities, temporary workers, older workers, and workers traditionally employed in low-wage jobs); “Addressing Selected Emerging and Developing Issues” (including the use of qualification standards or other policies that negatively affect disabled workers, protecting workers affected by pregnancy, childbirth or related medical conditions, preventing discriminatory bias towards religious minorities or LGBTQIA+ individuals, and the use of artificial intelligence or automated recruitment tools for hiring); “Advancing Equal Pay for All Workers” (including a focus on employer policies that prevent or attempt to limit workers from asking about pay, inquiring about applicants’ prior salary histories, or prohibiting workers from sharing their compensation with coworkers); “Preserving Access to the Legal System” (including the use of overly broad releases or nondisclosure agreements, the implementation of unlawful mandatory arbitration provisions, and any failure to keep records required by statute or EEOC regulations); and “Preventing and Remedying Systemic Harassment.” The EEOC has indicated that it will focus on Charges that touch on the above topics while also intentionally prioritizing systemic enforcement actions and impact litigation to eradicate what it perceives to be discriminatory employment practices. As demonstrated briefly above, the EEOC has a keen interest in scrutinizing artificial intelligence and mass hiring practices via automatic recruitment tools, in addition to a renewed focus on employment practices that could have an adverse impact on those with intellectual or health-related disabilities, among other things. This could directly lead to an increase in Commissioner Charges, systemic investigations, pattern or practice lawsuits, and class action litigation regarding the topics listed in its Strategic Enforcement Plan. Employers should be vigilant in monitoring these key areas of risk related to the EEOC’s new Strategic Enforcement Plan, as EEOC investigations can quickly escalate to regional or even nationwide systemic investigations and corresponding litigation. Contact your Polsinelli attorney for further guidance on how you can bolster your employment practices to minimize the risk of potential EEOC enforcement actions, as well as class and collective actions, in your workplace.

Despite objections by thousands of employers and its continuing review of records, the OFCCP has been ordered by a federal court to produce all EEO-1 Type 2 reports of federal prime contractors and first-tier subcontractors from 2016-2020 as requested by the Center for Investigative Reporting (“CIR”) through multiple FOIA submissions. CIR filed litigation to enforce its FOIA request in December 2022 in the Northern District of California. On December 22, 2023, that court issued an order requiring OFCCP to produce the EEO-1 Type 2 reports, determining that the information included in the reports was not the type of “commercial” information protected from release under FOIA. Specifically, the court found that the reports were not exempt from disclosure under Exemption 4 of FOIA as the information in the reports is not “intrinsically valuable business information” and the headcounts in all industries and across broad job categories do not provide “commercial insight…specific to the operations of a federal contractor.” The court also rejected OFCCP’s assertion the data constituted trade secrets protected from disclosure and found no substantial risk of harm through the disclosure of competitive business secrets. While the court initially required OFCCP to produce the EEO-1 Type 2 reports by January 19, 2024, the parties agreed to extend the deadline to February 20, to give OFCCP an opportunity to determine whether to appeal the decision. It is anticipated that an appeal of the decision will delay any required disclosure of the reports. Contact your Polsinelli attorney for further guidance regarding this anticipated disclosure and other government contractor matters.

Around the world and across the United States, we see so many languages spoken. People around the world communicate in thousands of different languages. Given the wide origins of workers and companies with international operations, the question arises: to what extent should employers accommodate language needs, as in translating handbooks, policies, notices, or memos? Legally, the answer is murky: states and foreign jurisdictions adopt varying approaches. For example, in the United States, there is a varied patchwork of federal law that can apply requiring notices in languages besides English, while we have some states (Georgia, North Carolina, Michigan, Arizona, Missouri, etc.) that do not have any requirements for translating employment-related documents. In contrast, states like Ohio, Indiana, Maryland, and Washington encourage employers to provide translation or guidance for employment-related documents, while states like New York, Illinois, Virginia, and Massachusetts require notices and posters in languages besides English. Finally, some states like Tennessee, Colorado, Texas, and California have more specific laws and case law on requirements for translating employment-related documents. For employers with international operations, the answer will significantly vary based on an employee’s location. Some countries (like Australia and Switzerland) do not have any requirements, while many countries in Latin America, the United Kingdom, New Zealand, Singapore, etc. have recommended or preferred languages. Other countries like Israel, Denmark, India, South Africa, and Japan have requirements that employers ensure employees understand employment-related documents or that a document in a specific language will prevail in a dispute. However, many countries, such as Belgium, Canada, France, Romania, Ukraine, the United Arab Emirates, China, etc., do have specific language requirements, and some of them are based on regions within countries. It is clear that there is a lot of variety across the United States and around the world on whether employers must translate workplace documents. Employers should tread carefully with languages for employment documents, especially in light of ever-changing statutes across countries. Polsinelli is monitoring these requirements around the world. Contact our International Employment Law group for assistance with employment document translation in jurisdictions around the world, including those that may not have been discussed in this summary.

On January 9, 2024, the U.S. Department of Labor released the final details of their Independent Contractor test. This test addressing when companies can classify workers as independent contractors has been hotly debated since the last proposed rule by the Trump administration was struck down by the current DOL. The new rule will take effect on March 11, 2024. The new Independent Contractor focuses on the “economic realities of the working relationship” to determine if whether the worker is economically dependent on the company for work or if the worker is in business for themselves. The test is based on the “totality of the circumstances” and includes the following six factors: The opportunity for profit or loss depending on managerial skill; Investments by the worker and the company; Degree of permanence of the work relationship; Nature and degree of control of the worker – including whether the employer uses technological means of supervision (such as by means of a device or electronically), reserves the right supervise or discipline the worker, or places demands on a worker’s time that do not allow the worker to work for others or work when they choose; The extent to which the work performed is an integral part of the company’s business; and The skill and initiative of the worker – i.e., whether the worker possesses and uses specialized skills that they bring to the job, or is the worker dependent on training from the company to perform the work. While the DOL identified these six factors, it is clear that no factor has a predetermined weight, and also indicated that other “additional factors” may be relevant if they are indicative of whether the worker is in business for themselves. Pending the effective date, the DOL has issued FAQs which can be found at: https://www.dol.gov/agencies/whd/flsa/misclassification/rulemaking/faqs With this new test, companies should carefully review whether the workers they have classified as independent contractors meet the new requirements and take any appropriate action if they believe they are misclassified. Polsinelli attorneys are available to assist with this review and analysis.