Quick Hits

• Twenty states and the District of Columbia recently filed suit in the U.S. District Court for the District of Massachusetts, challenging the USDA’s new funding conditions related to anti-DEI, gender ideology, and immigration requirements.
• Similar certification requirements are emerging across federal agencies, including a certification recently proposed by the U.S. General Services Administration (GSA).
• Federal grant recipients and contractors may wish to evaluate their DEI-related programs and monitor these developments, given the potential for significant False Claims Act and criminal liability exposure.

USDA Conditions

On December 31, 2025, the USDA released an updated document outlining the terms and conditions for federal funding for various organizations. The conditions, which apply to every USDA grant, cooperative agreement, and mutual interest agreement, encompass arenas such as nutrition assistance, agricultural research, forestry and firefighting, land-grant university funding, and 4-H youth programs.

The document contains four funding conditions that are being challenged thusly:

• The antidiscrimination policy conditions require recipients to certify compliance with “all federal antidiscrimination laws, regulations, and policies,” including specific executive orders, but do not define the relevant “policies” or limit the time for compliance.
• The gender ideology condition prohibits the use of funds that “promote gender ideology,” but does not explain what activities this encompasses.
• The sports condition prohibits directing funds toward programs that “deprive women and girls of fair athletic opportunities” or permit “male competitive participation in women’s sports,” without defining those terms.
• The immigration condition prohibits directing funds toward programs that “allow illegal aliens to obtain taxpayer-funded benefits,” without defining “benefits” or explaining the scope.

The 2026 conditions label these requirements as material “conditions of payment” going to “the essence of the federal award,” and the USDA has expressly threatened False Claims Act liability for noncompliance.

Lawsuit Details

The plaintiffs—a coalition of twenty U.S. states and the District of Columbia—have sued the USDA, asserting six causes of action arising under the Spending Clause of the U.S. Constitution and the Administrative Procedure Act (APA). The plaintiffs allege in their complaint that the conditions are vague, coercive, unrelated to the federal interest in the underlying programs, and in violation of the Constitution.

The plaintiffs also allege the conditions are arbitrary, capricious, and beyond the USDA’s statutory authority for mandatory entitlement programs (such as the Supplemental Nutrition Assistance Program (SNAP)), wherein Congress prescribed eligibility criteria, leaving no room for additional conditions. It claims the conditions were imposed without required notice-and-comment rulemaking and conflict with federal statutes such as 8 U.S.C. § 1615, which mandates school lunch eligibility, regardless of immigration status.

GSA Action

The USDA’s conditions are part of a broader, government-wide effort to embed anti-DEI compliance requirements into federal funding relationships. On February 18, 2026, the GSA released a draft revised Supporting Statement, proposing a DEI-related certification that would be added to the SAM.gov registration process for all entities receiving federal financial assistance.

The GSA certification implements Executive Order (EO) No. 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,“ and the U.S. attorney general’s July 2025 memorandum, “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.” A parallel certification for federal contractors through the Federal Acquisition Regulation (FAR) is expected in the near future. Public comments on the GSA proposal are due by March 30, 2026.

The GSA certification shares key features with the USDA conditions. Both impose broad, anti-DEI and immigration-related compliance requirements, and both carry False Claims Act liability for noncompliance. However, the GSA certification goes further by imposing potential criminal liability on individual signatories.

There are other notable differences. While the USDA conditions use vague, undefined terms like “gender ideology” and “fair athletic opportunities,” the GSA certification provides specific examples of prohibited practices, such as race-based scholarships, preferential hiring, and “diverse slate” policies, though it focuses narrowly on race and color, omitting other protected categories. The USDA conditions were also imposed unilaterally, whereas the GSA certification is subject to a public comment period.

Both the USDA and GSA actions implement the same set of executive orders, particularly EO 14173 and EO 14168, and are illustrative of a broader trend. Federal agencies across the government are increasingly incorporating anti-DEI certification and compliance requirements into their funding agreements and procurement processes. Grant recipients and federal contractors may wish to anticipate similar conditions, regardless of which agency administers their funding.

Next Steps

It remains unclear how Judge Myong J. Joun, the U.S. district judge assigned to the case, will rule. If Judge Joun grants an injunction, the administration may appeal the order or pursue a formal rulemaking process. If the USDA conditions remain in effect, organizations may face False Claims Act exposure for certifications that contain undefined or ambiguous terms. Either way, the USDA lawsuit is just one front in a broader effort. The GSA certification process and other agency-specific implementations of EO 14173 will continue separately, and a parallel FAR certification for federal contractors is expected.

Organizations that receive funding from any federal agency or hold federal contracts may wish to consider taking the following steps:

• submitting public comments on the GSA’s proposed certification by March 30, 2026, particularly organizations in healthcare, behavioral health, social services, and other fields where grants frequently target specific populations;
• conducting privileged audits of DEI-related programs, policies, and employment practices to evaluate their compliance posture before signing any certifications, given the False Claims Act and potential criminal liability exposure;
• monitoring agency-specific implementations of EO 14173 across the federal government, as similar certification conditions are likely to appear beyond USDA and GSA; and
• assessing whether the USDA’s sports and gender conditions, the GSA’s race-focused DEI certification, or future agency requirements could conflict with state or local laws protecting against discrimination based on gender identity, sexual orientation, or other characteristics.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance, Government Contracting and Reporting, and Workforce Analytics and Compliance practice groups will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Reporting, and Workforce Analytics and Compliance blogs as additional information becomes available.

In addition, Ogletree Deakins will present a webinar on April 7, 2026, for federal contractors and subcontractors. Our speakers will include Simone R.D. Francis, a shareholder and co-chair of the firm’s Diversity, Equity, and Inclusion Compliance Practice Group, Joseph E. Ashman, a shareholder and co-chair of the firm’s Government Contracting and Reporting Practice Group, and Cameron W. Ellis, of counsel and a member of the Government Contracting and Reporting Practice Group. Register here.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

T. Scott Kelly is a shareholder in Ogletree Deakins’ Birmingham office, the co-chair of the firm’s Government Contracting and Reporting Practice Group, and the chair of the firm’s Workforce Analytics and Compliance Practice Group.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• Expanded worker protections are becoming the norm across nearly all jurisdictions.
• Reduced working hours are trending globally.
• AI regulation in HR is accelerating, from the EU AI Regulation affecting Germany, to Ontario’s AI disclosure rules in Canada, to the UAE’s use of AI for enforcement.
• Compliance and reporting standards continue to rise, including enhanced pay transparency requirements and contractor classification rules.

From sweeping labor code consolidations to new AI disclosure requirements, employers operating internationally will want to stay ahead of these critical changes. Below are the top ten employment law developments for global employers to watch.

1. Belgium: Notice Period Cap Reduces Termination Costs

A draft act, which is expected to pass soon, has been submitted to the Belgian Federal Parliament that would cap the notice period for employer-initiated terminations at fifty-two weeks (one year), even for very long-tenured employees. Previously, long-tenured employees could accrue notice periods of more than a year, creating substantial financial exposure for employers during workforce reductions or restructurings. This cap represents a meaningful reduction in termination costs, particularly for employees with fifteen or more years of service who historically would have qualified for much longer notice periods. However, because this cap would apply only to new contracts and would accrue with seniority, its practical effects would not materialize until those employees accumulate sufficient service. Employers may want to review their workforce planning models, termination cost projections, and restructuring scenarios in light of this potential change, as the savings compared to the previous regime can be substantial. For more details, see our podcast “Cross-Border Catch-Up: 2026 Employment Law Changes in Poland, Belgium, and the Netherlands.”

2. Brazil: Mental Health Reporting, Pending Critical Caselaw, and Immigration Updates

Under the updated Regulatory Norm No. 1 (NR‑1), employers must include mental health and psychosocial risks, such as burnout, harassment, and excessive working hours, in their Occupational Risk Management Programs. Formal enforcement of NR-1 begins on May 26, 2026.

Additionally, Brazil’s Federal Supreme Court is considering whether wage deductions for meal and transport allowances should be included in the base for the employer’s social security contributions, a decision that will affect payroll administration and employer costs.

Finally, Decree No. 12,657/2025 allows foreign nationals to perform short-term technical activities under a regular visitor visa, increasing flexibility for international business operations.

3. Canada: AI Disclosure, Pay Transparency, and Leave Expansions

Canada is introducing several significant changes across multiple provinces. Ontario now requires employers to disclose when artificial intelligence (AI) is used in hiring decisions. Employers must inform both candidates and employees when AI systems are deployed in recruitment, screening, assessment, or selection processes. Ontario is also mandating salary range disclosure in job postings, designed to address wage gaps and promote equal pay.

Leave entitlements are expanding: long-term illness leave has been extended in several provinces, and Saskatchewan has updated its maternity leave and introduced new leave for employees affected by domestic or sexual violence. Saskatchewan has also introduced new restrictions on employer tip withholding, effectively limiting management’s ability to retain or redistribute gratuities.

For more information, see our article, “New Year, New Laws: 2026 Updates in Canadian Employment Standards.”.

4. Germany: EU AI Regulation Hits HR Systems

Beginning in August 2026, the EU AI Regulation will take full effect in Germany, with significant implications for HR technology. The AI Regulation establishes strict requirements for “high-risk” AI systems, which include AI used in recruitment, performance management, task allocation, and promotion decisions. Employers will be required to conduct conformity assessments, maintain detailed documentation, ensure human oversight, and implement ongoing monitoring systems. Noncompliance can result in substantial fines.

Beyond AI, Germany has eliminated the rule that previously prevented employers from offering fixed-term contracts without objective justification to employees who had already worked for them after reaching statutory retirement age. As a result, employers may be able to extend working relationships with experienced employees without triggering indefinite employment obligations.

More changes include updates to social insurance contribution thresholds and expanded maternity protections. For more information, see our article, “Developments in German Employment Law for 2026.”

5. India: Historic Labor Law Consolidation

India is implementing one of the most ambitious labor law reforms in its history, consolidating twenty-nine statutes into four streamlined labor codes in an attempt to simplify compliance while significantly expanding worker protections.

• The Code on Wages establishes a universal minimum wage across all sectors and standardizes the definition of “wages” to close loopholes that allowed employers to artificially reduce provident fund and gratuity obligations through allowance structuring.
• The Industrial Relations Code formally recognizes fixed-term employment as a distinct employment category, raises the headcount threshold for employers required to seek government permissions before terminations from 100 to 300 employees (reducing the compliance burden for mid-sized companies), and introduces a mandatory Re-Skilling Fund to support displaced workers.
• The Social Security Code dramatically extends coverage to previously excluded categories including gig workers, platform workers, and workers in the unorganized sector, potentially bringing millions of additional workers into the social safety net.
• The Occupational Safety and Health Code extends formal health and safety protection to a broader range of employers and workers, while also restricting the use of contract labor for core business activities, effectively requiring direct employment for individuals who perform essential functions.

For more details, see our podcast, “Cross-Border Catch Up: Unpacking India’s Labor Law Shake-Up.”

6. Mexico: Workplace Violence Prevention and the Forty-Hour Workweek

Mexico has introduced two major reforms with far-reaching implications.

The first targets workplace culture: mandatory workplace violence prevention training is now required, accompanied by enhanced anti-discrimination obligations that may require employers to review and update their policies, training materials, and reporting mechanisms.

Second is the constitutional reform reducing the standard workweek from forty-eight hours to forty hours with one critical restraint: wages cannot be reduced for affected employees. Employers must maintain current salary levels while absorbing a roughly 17 percent reduction in working hours. Though the reform will be phased in through 2030 to give businesses time to adjust, employers may want to begin planning now for the financial and operational impacts.

For a comprehensive summary of what to look forward to in Mexican labor and employment law this year, see our articles, “Mexico’s Labor Law in 2026: Key Developments Include Workplace Violence Prevention and 40-Hour Workweek” and “Mexico Labor and Employment Law Roundup for 2025, and What’s Coming in 2026: A Brief Compliance Guide.”

7. Netherlands: Cracking Down on Contractor Misclassification

Until recently, employers in the Netherlands were waiting for the VBAR Act to go into effect. The VBAR Act was intended to introduce a more rigorous framework for evaluating whether a working relationship constitutes genuine independent contractor status or disguised employment. In early March 2026, however, the Cabinet of the Netherlands decided to abandon most of the VBAR Act. While the Cabinet may retain portions of the VBAR Act, such as the legal presumption that workers earning below EUR 38 per hour are employees, it is expected that the Cabinet will soon introduce a new framework for evaluating employment status called the Self-Employed Act. Until then, employers will want to refer to the Deregulation of Labour Relations Assessment Act (DBA) Act when assessing whether a working relationship qualifies as genuine self-employment.

Additionally, there is a renewed push for authorities to investigate potential misclassification of workers. Tax authorities and labor inspectorates are conducting coordinated audits and investigations, and employers found to have misclassified workers face potential back payments for social security, income tax withholding, payroll taxes, pension contributions, and vacation pay, often stretching back multiple years, plus penalties and interest on top. Companies relying heavily on independent contractors, freelancers, or intermediary arrangements may want to review those relationships to mitigate significant financial and legal exposure.

For more details, see our podcast, “Cross-Border Catch-Up: 2026 Employment Law Changes in Poland, Belgium, and the Netherlands.”

8. Poland: Service Length Recognition Expands

As of January 1, 2026, Poland expanded service length recognition rules, significantly impacting multiple employment entitlements. Time spent with predecessor entities and related companies, and in some cases other employers, now counts toward seniority, which directly affects notice periods (longer tenure = longer notice), severance entitlements (often based on length of service), and vacation accruals (which typically increase with tenure). Companies operating in Poland may want to review employment continuity for employees who transferred from related entities and recalculate entitlements under the new rules. Failure to properly recognize service can result in disputes over termination entitlements and leave calculations.

Employers must also update their personnel file practices to meet new standards on what information must be maintained, for how long, and what documentation must be provided to employees. For more details, see our podcast, “Cross-Border Catch-Up: 2026 Employment Law Changes in Poland, Belgium, and the Netherlands.”

9. UAE: Emiratisation Enforcement Intensifies

The UAE is significantly ramping up Emiratisation requirements and enforcement mechanisms. Companies with fifty or more employees must now meet a 10 percent Emirati quota in skilled roles, while those with twenty to forty-nine employees across fourteen designated sectors (including banking, insurance, telecommunications, and healthcare) must employ at least two Emiratis. Notably, the UAE government is deploying AI-powered surveillance systems to monitor compliance and detect quota avoidance schemes such as “ghost employees” or sham arrangements.

A new minimum wage of AED 6,000 per month (approximately USD 1,635) will apply to all Emirati employees. It takes effect on January 1, 2026, for new, renewed, and amended work permits, and on June 30, 2026, for existing employees. Penalties for noncompliance have increased dramatically (between AED 100,000 to one million per violation, or approximately USD 27,200 to 272,000), and courts can order employers to continue to pay affected Emirati workers for up to two months during investigations. The government is also considering fundamental reforms to the end-of-service gratuity system, potentially transitioning from the traditional lump-sum payment model to a defined contribution savings plan framework similar to pension systems in other jurisdictions. This would shift both the timing and structure of end-of-service obligations.

10. United Kingdom: The Employment Rights Act 2025 Takes Effect

The UK’s Employment Rights Act 2025 will fundamentally reshape employer obligations over the course of this year. The legislation creates a new Fair Work Agency to oversee enforcement, signaling a more aggressive regulatory approach. Key changes include:

• Statutory sick pay (SSP) will be a day-one entitlement with no waiting period and the lower earnings limit for SSP will be removed.
• Paternity and unpaid parental leave will also become available from the first day of employment, and paternity leave will be permitted after shared parental leave.
• Bereaved Partner’s Leave regulations come into force, providing a right to up to fifty-two weeks of leave where the child’s “primary carer” (usually the mother or other adoptive parent) has died within fifty-two weeks of the birth or adoption placement.
• Redundancy penalties will double, with the maximum penalty now reaching 180 days’ actual pay per employee (a significant increase from the previous ninety-day cap).

Whistleblowing protection will explicitly include disclosures related to sexual harassment. Further legislative changes under the Employment Rights Act 2025 are scheduled for October 2026. For more details, please see our article, “The Year Ahead in UK Employment Law: An Overview of Changes Scheduled in 2026.”

Additionally, the Data Use and Access Act (DUAA), expected to take effect in June 2026, introduces new complaint procedures with a thirty-day acknowledgment requirement.

These reforms represent one of the most significant expansions of worker rights in recent UK history.

Key Takeaways for Global Employers

Several clear themes emerge from these 2026 developments:

• Expanded worker protections are becoming the norm across nearly all jurisdictions, from day-one entitlements in the UK to gig worker coverage in India.
• Reduced working hours are trending globally, with Mexico’s forty-hour workweek reform part of a broader movement.
• AI regulation in HR is accelerating, from the EU AI Regulation affecting Germany, to Ontario’s AI disclosure rules in Canada, to the UAE’s use of AI for enforcement.
• Compliance and reporting standards continue to rise across the board, including enhanced pay transparency requirements and contractor classification rules.
• Employers with global operations may want to conduct a comprehensive review of their policies and practices in each jurisdiction to ensure compliance with these evolving requirements. Proactive preparation now may help avoid costly surprises later.

Ogletree Deakins’ Cross-Border Practice Group will continue to monitor developments and will post updates on the Cross-Border blog as additional information becomes available.

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Quick Hits

• Germany’s Federal Labor Court ruled that recurring seasonal allergies like hay fever may be considered a continuation of the same underlying condition rather than new illnesses.
• Employers can contest sick leave claims for recurring seasonal allergies if the employee has been absent for more than six weeks within the relevant periods, shifting the burden of proof to the employee.
• Employers are generally protected against liability for allergic reactions in the workplace if they respond appropriately to known health risks and do not act with intent to cause harm.

Pollen Allergy as a Potential Continuing Illness

Germany’s Federal Labor Court (Bundesarbeitsgericht (BAG)) addressed this issue in its decision of January 18, 2023 (Ref. No. 5 AZR 93/22). The court emphasized that the existence of “the same illness” within the meaning of Section 3(1) sentence 2 of the Continued Remuneration Act (Entgeltfortzahlungsgesetz (EFZG)) is not automatically excluded even in the case of “recurring (chronic) respiratory conditions.”

Hay fever is typically rooted in a permanent allergic condition that can recur seasonally and lead to incapacity to work. Different symptom presentations—such as sneezing fits, coughing, eye irritation, and difficulty concentrating—may therefore all stem from the same underlying condition.

Recommendations for Employers

Sick leave certificates for recurring seasonal illnesses and documented absences within the six-month and twelve-month periods set out in Section 3(1) sentence 2 of the EFZG are of legal significance. Where an employee has already been absent for more than six weeks during the relevant periods, and the circumstances—such as annual absences during pollen season—suggest a continuing illness, the employer may contest that each episode constitutes a “new” illness and refuse to continue paying remuneration.

In that case, the burden shifts to the employee to explain, in plain terms, the specific causes of the illness for the entire relevant period and to release the treating physicians from their duty of confidentiality. Sick leave certificates alone, ICD-10 codes, or notices from health insurers are not sufficient to meet this burden of explanation. If the employee fails to provide this information, a continuing illness may be assumed, with the result that no further claim for continued remuneration exists.

Protective Measures and Risk Assessment

Section 5(3) No. 2 of the Occupational Health and Safety Act (Arbeitsschutzgesetz (ArbSchG))—governing biological hazards—read in conjunction with the general duty of care under Section 3 of the ArbSchG and Section 618 of the German Civil Code (Bürgerliches Gesetzbuch (BGB)), may give rise to an obligation to address pollen in workplace risk assessments. Employers may want to include allergies in such assessments—even at office workplaces—because they represent real health risks that must be considered legally, regardless of their severity in individual cases or the absence of measurable thresholds.

Key Takeaways—Liability Risks

A decision of the Regional Labor Court of Rhineland-Palatinate (Landesarbeitsgericht Rheinland-Pfalz (LAG Rheinland-Pfalz)), 8th Chamber, dated June 14, 2016 (Ref. No. 8 Sa 535/15), demonstrates that employers are generally protected against liability for allergic reactions in the workplace, provided they respond appropriately to known health risks and have not acted with intent to cause harm. The burden of proof for intentional or grossly negligent conduct lies with the employee and is difficult to meet in practice. Below this threshold, the liability privilege under Section 104(1) of Book VII of the German Social Code (Sozialgesetzbuch (SGB VII)) applies.

Employers that take no protective measures despite knowing that their employees suffer from pollen allergies risk higher rates of absenteeism. However, fines under the Industrial Safety Regulation (Betriebssicherheitsverordnung) and civil liability risks are unlikely in practice.

Ogletree Deakins’ Berlin and Munich offices will monitor developments and post updates on the Germany and Leaves of Absence blogs as additional information becomes available.

Dr. Martin Römermann is a partner in the Berlin office of Ogletree Deakins.

Lela Salman, a law clerk in the Berlin office of Ogletree Deakins, contributed to this article.

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Quick Hits

• On March 26, 2026, President Trump issued an executive order (EO) with broad applicability to federal contractors and subcontractors, but certain agreements would not likely be covered by the EO, including Other Transaction Agreements (OTAs), cooperative agreements, and grants.
• The EO defines “racially discriminatory DEI activities” as disparate treatment based on race or ethnicity across hiring, promotions, vendor agreements, training, and program participation—a notable departure from earlier EOs that used the phrase “unlawful DEI” without defining it.
• Enforcement authority appears to rest with individual contracting agencies, which may terminate or suspend contracts and initiate debarment, while the attorney general is directed to “consider” or, per the White House fact sheet, “prioritize” False Claims Act actions against violators.
• Agencies must include the mandatory clause in contracts within thirty days ahead of the FAR Council’s sixty-day deadline for interim deviation guidance raising practical considerations around DEI program audits, subcontractor oversight, recordkeeping, and False Claims Act exposure.

The EO applies to contracts that are subject to the Federal Property and Administrative Services Act of 1949 (FPASA), which is a core statutory authority for the federal procurement system. The EO requires a mandatory clause in covered federal contracts prohibiting “racially discriminatory DEI activities,” with noncompliance carrying contract termination, debarment, and False Claims Act liability including treble damages and whistleblower qui tam suits.

What’s Prohibited

The EO introduces direct contractual consequences, including contract termination, debarment, and False Claims Act liability, for private-sector contractors and subcontractors that engage in what it defines as racially discriminatory DEI activities.

The administration characterizes DEI activities as practices in which “employees, applicants, or contracting parties are treated differently, separated, or singled out based on their race or ethnicity, rather than treated equally and objectively based on their merit,” contending that such activities impose artificial costs that are ultimately passed on to the federal government through its contractors. The EO does not prohibit all DEI activities. Its prohibitions are limited on their face to “racially discriminatory DEI activities,” which it defines as disparate treatment based on race or ethnicity in recruitment, employment (including hiring and promotions), contracting (including vendor agreements), program participation, and resource allocation. This represents a departure from earlier EOs that introduced the phrase “unlawful DEI” without providing any specific definition of the term. By contrast, this EO offers an express definition tied to disparate treatment based on race or ethnicity, giving contractors a more concrete though still broad framework for assessing compliance.

“Program participation” is broadly defined to include training, mentoring, leadership development programs, educational opportunities, clubs, associations, and similar opportunities sponsored by the contractor or subcontractor. As such, the term potentially encompasses employee resource groups, affinity networks, and mentorship programs. The breadth of the definition and the severity of the enforcement mechanisms may effectively discourage a broader range of programs and activities that have been associated with diversity initiatives.

The Clause

Within thirty days, all executive departments and federal agencies must include a specific clause in their contracts, contract-like instruments, and subcontracts at all tiers. The clause prohibits contractors from engaging in racially discriminatory DEI activities; requires them to provide the contracting agency with access to books, records, and accounts for compliance verification; and obligates them to report subcontractor conduct that may violate the clause and take remedial actions as directed. Noncompliance can result in contract termination or suspension, as well as debarment from future government contracts.

Critically, the clause requires the contractor to acknowledge that compliance is “material to the Government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code (False Claims Act),” establishing the factual predicate for False Claims Act enforcement and potentially exposing noncompliant contractors to significant financial penalties.

Who Enforces It

The EO does not appear to create a centralized enforcement body. Primary authority rests with the individual contracting agencies, which may cancel, terminate, or suspend contracts and initiate suspension or debarment proceedings. The Office of Management and Budget (OMB) is directed to issue compliance guidance to those agencies and, with the attorney general, the assistant to the president for domestic policy, and the “EEOC Chairman,” to identify high-risk economic sectors and issue sector-specific guidance. Agency heads must review implementation within 120 days, with regular reviews thereafter. On the litigation front, the EO directs the attorney general to “consider” bringing False Claims Act actions against violators, while the accompanying White House fact sheet uses notably stronger language, stating that the attorney general is directed to “prioritize” such claims. The EO also directs the attorney general to ensure prompt review of qui tam actions, including rendering an intervention decision within the sixty-day statutory period “to the maximum extent practicable.”

FAR Amendments and Timing

The Federal Acquisition Regulatory (FAR) Council is directed to amend the Federal Acquisition Regulation (FAR) to include the mandatory clause and remove conflicting provisions. As an interim measure, the FAR Council must issue deviation guidance within sixty days to facilitate implementation pending formal rulemaking. Notably, there is a potential timing tension as the EO’s thirty-day mandate for agencies to include the clause in contracts precedes the FAR Council’s sixty-day deadline to issue interim deviation guidance. This may leave agencies resolving implementation questions before a formal regulatory framework is in place. More broadly, this EO arrives as the administration is simultaneously working to implement the FAR overhaul executive order, signaling a broader effort to reshape the federal procurement landscape.

What’s Next

The EO raises a number of practical considerations for federal contractors and subcontractors. Key areas of focus include auditing existing DEI programs, policies, training initiatives, employee resource groups, and vendor diversity requirements to identify any disparate treatment based on race or ethnicity that could fall within the EO’s prohibition. Subcontractor oversight is another consideration, as contractors are obligated to monitor subcontractor compliance, report known or reasonably knowable violations, and take directed remedial action. Recordkeeping systems that are adequate to furnish the “books, records, and accounts” required for compliance verification will also be relevant.

Forthcoming OMB guidance identifying high-risk sectors and any additional compliance requirements applicable to specific industries may further shape the compliance landscape.

The EO includes a severability clause and does not create any enforceable private right of action, though the False Claims Act’s existing qui tam provisions provide an independent avenue for private enforcement. The compliance landscape is likely to evolve rapidly as OMB issues implementing guidance, the FAR Council promulgates interim and final amendments, and agencies begin incorporating the mandatory clause into contracts.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group, Government Contracting and Reporting Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and post updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Reporting, Governmental Affairs, and Workforce Analytics and Compliance blogs as additional information becomes available.

Ogletree Deakins will present a webinar on April 7, 2026, discussing the implications of this executive order for federal contractors and subcontractors. Our speakers will include Simone R.D. Francis, a shareholder and co-chair of the firm’s Diversity, Equity, and Inclusion Compliance Practice Group, Joseph E. Ashman, a shareholder and co-chair of the firm’s Government Contracting and Reporting Practice Group, and Cameron W. Ellis, of counsel and also a member of the Government Contracting and Reporting Practice Group. Register here.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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Quick Hits

• The DOJ has reportedly launched a potential criminal investigation into a human resources software start-up for alleged corporate espionage against a rival company.
• The potential probe comes amid back-and-forth lawsuits between the two companies, including claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and Defend Trade Secrets Act (DTSA).
• The situation highlights the need for robust corporate governance and compliance programs.

According to a Wall Street Journal report, the DOJ has opened a criminal investigation into Deel, a human resources and payroll software company valued at approximately $17 billion, over allegations that it orchestrated a corporate espionage operation against rival firm Rippling. The report indicates that U.S. Attorney Craig H. Missakian for the Northern District of California has issued grand jury subpoenas seeking documents and information related to an alleged spying operation.

Deel has said that it was not aware of any criminal investigation and would cooperate with authorities. The company has denied such allegations.

The potential criminal probe comes after back-and-forth lawsuits between the rival companies, with allegations of corporate espionage that have rocked the technology and start-up world. But the DOJ’s alleged involvement potentially raises the stakes, underscoring the legal boundaries in competitive intelligence between companies and the importance of trade secret protection.

Competing Civil Allegations

In March 2025, Rippling filed a civil lawsuit against Deel in the U.S. District Court for the Northern District of California, alleging Deel “cultivated a spy to systematically steal its competitor’s most sensitive business information and trade secrets,” including “sales leads, sales pipeline, and its entire playbook for pitching prospective clients.”

An amended complaint filed in June 2025 named several of Deel’s executives and alleged that Deel directed a “racketeering enterprise” that victimized at least four companies, claiming violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Defend Trade Secrets Act (DTSA), among other counts. Specifically, Rippling claims Deel conspired with other defendants in a corporate espionage scheme that included Deel hiring Rippling employees—who allegedly took and gave confidential company information to their new employer—and paid cryptocurrency to an existing Rippling employee in exchange for his misuse of numerous software services to steal trade secrets. Last month, the U.S. District Court for the Northern District of California found that some state law claims against Deel were preempted but largely denied motions to dismiss the remainder of the suit.

Deel has denied Rippling’s allegations, calling them a “smear campaign,” and has fired back with a countersuit in Delaware state court. That suit alleges that Rippling has “engaged in a corporate espionage scheme against Deel for the purpose of stealing Deel’s proprietary product information to build Rippling’s own competing products” and “copycat” its products.

Trade Secret Protection Under Federal Law

The DTSA, enacted in 2016, amended the Economic Espionage Act (EEA) to create a private civil right of action for trade secret misappropriation. Critically, the DTSA also amended federal law to treat a violation of the EEA as a predicate offense under RICO. That means trade secret theft can trigger RICO’s enhanced remedies, including mandatory treble damages and attorneys’ fees in civil actions (plus up to twenty years imprisonment in criminal cases).

Compliance Considerations for Corporate Counsel

• Competitive Intelligence Programs—This dispute highlights a critical distinction between lawful competitive research and unlawful corporate espionage. The alleged conduct—if true—potentially crossed legal boundaries by involving the theft of confidential information through an insider, misappropriation of trade secrets, and potential wire fraud through electronic communications used to facilitate the scheme.
• Insider Threat Detection and Access Controls—A notable aspect of the case is the allegation that the scheme was allegedly detected in part by an internal security measure, with the use of a “honeypot” trap in which the security team set up a dummy communication platform that the spy allegedly accessed and searched. This highlights the importance of system monitoring and strict access controls for sensitive information.
• Corporate Governance—The allegations in this case extend to company executives said to have personally directed the alleged espionage operation. If substantiated, this would represent a failure of corporate governance. Moreover, the DOJ’s involvement could signal potential criminal corporate misconduct.

Key Takeaways

The DOJ’s reported criminal inquiry represents an instance of infrequently publicized governmental involvement in corporate espionage enforcement. While the allegations remain unproven and Deel maintains its innocence, the case serves as a stark reminder that aggressive competitive tactics can cross legal boundaries—some of which can have severe consequences. The intersection of trade secret law, RICO, and potential criminal prosecution creates a powerful enforcement framework that can result in treble damages, criminal penalties, and reputational harm.

In light of this case, companies may want to consider:

• implementing enhanced security measures to protect trade secrets, including comprehensive trade secret identification and protection programs, access controls, encryption, and employee training on handling confidential information;
• reviewing compliance programs to ensure that competitive intelligence activities remain firmly within legal bounds; and
• reviewing corporate governance mechanisms and executive training to ensure accountability and compliance.

Ogletree Deakins’ Whistleblower and Compliance Practice Group and Unfair Competition and Trade Secrets Practice Group will continue to monitor developments and will provide updates on the Ethics / Whistleblower, Unfair Competition and Trade Secrets, and Workplace Investigations and Organizational Assessments blogs as additional information becomes available.

A version of this article was previously published by the American Bar Association Litigation Section: Corporate Counsel.

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Quick Hits

• Law 2466 of 2025 introduces significant labor reforms in Colombia, including prioritizing indefinite-term contracts, redefining work schedules, and expanding paid leave.
• The reform mandates hiring quotas for people with disabilities, strengthens anti-discrimination protections, and introduces new teleworking modalities.
• Night shifts will continue to carry a 35 percent premium, and work on Sundays and holidays will see a gradual increase in pay, reaching a 100 percent premium by July 2027.

Overview of Law 2466

Law 2466 introduces substantial changes to Colombia’s labor laws, with some provisions taking effect immediately, and full implementation by July 2027. Key changes include the following:

• Prioritization of indefinite-term contracts for core business activities
• New procedures for workplace investigations
• Redefinition of daytime and nighttime work schedules
• New types of paid leave
• Mandates to hire people with disabilities
• Strengthened protections from discrimination
• Social security benefits for certain digital platform gig workers
• New teleworking modalities

Key Changes in Employment Contracts

While fixed-term and work-specific contracts are still permissible, they are now limited to a maximum of four years before transitioning into indefinite contracts. This change aims to prevent the perpetual renewal of short-term contracts, encouraging more stable employment relationships.

Workplace investigations

The reform also introduces new procedures for workplace investigations. Employees facing disciplinary action must be notified in writing of the process and charges, have access to evidence, and be given at least five days to prepare a defense. Unionized workers can be accompanied by union representatives during these proceedings. Because of these changes,  companies are required to update their internal regulations within twelve months of the law’s enactment.

Redefining working hours

Starting December 25, 2025, the definition of daytime and nighttime work schedules changed. Daytime work will be from 6 a.m. to 7 p.m., and nighttime work from 7 p.m. to 6 a.m. The prior schedule was 6 a.m. to 9 p.m. for daytime work and 9 p.m. to 6 a.m. for nighttime work. Night shifts will continue to carry a 35 percent premium, and work on Sundays and holidays will see a gradual increase in pay, reaching a 100 percent premium by July 2027. The phase-in schedule is 80 percent from July 2025, and 90 percent from July 2026.

Expanded paid leave

Law 2466 introduces new types of paid leave, including leave for urgent medical appointments, specialist visits, school-related obligations for guardians, and legal or administrative summons. A unique provision allows employees who commute by bicycle to take a rest day every six months, if agreed with their employer.

Inclusion and protections for vulnerable groups

The reform mandates that companies with one hundred or more employees hire at least two people with disabilities per one hundred workers. For companies with 501 or more employees, the requirement is at least one person with disabilities per one hundred workers. The law also strengthens protections against discrimination based on gender, sexual orientation, race, religion, disability, mental health, pregnancy, or status as a victim of violence. Employers must establish workplace protocols and committees to prevent and address harassment and violence.

Regulation of digital delivery platform workers

The reform recognizes two types of delivery platform workers: dependent employees covered by the labor code and independent contractors who must still participate in the social security system. This ensures that gig workers, whether full employees or freelancers, have access to benefits like health insurance and occupational risk coverage.

Teleworking modalities

Two new telework modalities have been introduced:

Business Concerns and Government Response

Some business groups, particularly small and medium enterprises, have expressed concerns about the costs associated with higher wages, mandatory hiring quotas, and administrative changes. They worry that these requirements could lead to increased unemployment or informality (i.e., employment that does not grant employees minimum statutory requirements) if companies struggle to comply. However, the government argues that these changes will boost productivity and formalization in the long run and is implementing mechanisms to ensure compliance.

Unique Aspects of the Reform

One standout feature of the reform is the introduction of a “family day,” an optional measure for employers to organize activities promoting work-life integration. Additionally, workers with caregiving responsibilities can propose flexible schedules, and there is even a provision for bringing pets to work with a medical certificate.

Conclusion

Law 2466 of 2025 represents a landmark reform in Colombia, with significant implications for both workers and businesses. Employers may want to review and update their internal policies and practices to ensure compliance with the new requirements.

Ogletree Deakins’ Cross-Border Practice Group will continue to monitor developments and will post updates on the Cross-Border, Leaves of Absence, Wage and Hour, Workplace Safety and Health, and Workplace Violence Prevention blogs as additional information becomes available.

Carlos G. Colón-Machargo is a shareholder in the Atlanta office of Ogletree Deakins.

Lina Fernandez is an associate in the Boston office of Ogletree Deakins.

Peg Ventricelli, a practice assistant in the Stamford office of Ogletree Deakins, contributed to this article.

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Quick Hits

• In Walsh v. HNTB Corp., a former employee sued an architectural design firm for age discrimination and constructive discharge after it placed her on a performance improvement plan (PIP).
• The First Circuit found that the facts of this case did not meet the standard for an adverse employment action established with the Supreme Court of the United States’ decision in Muldrow v. City of St. Louis.
• While a PIP may be an adverse employment action, if it negatively impacts the terms and conditions of employment, the mere fact of a PIP is not enough.

After a performance review cited some concerns, HNTB Corp. placed an information technology worker on a PIP in 2019, which she successfully completed. She resigned in 2020 at the age of fifty-five and sued for age discrimination and constructive discharge. She said her supervisor told her that she could “be replaced with younger, cheaper people” and that the company was “not getting its return on investment” on her.

The employer argued that it decided to implement the PIP because of performance issues and not as pretext for age discrimination.

On December 21, 2023, the U.S. District Court for the District of Massachusetts ruled in favor of the employer at summary judgment. It reasoned that the plaintiff’s successful completion of the PIP, the absence of demotion or pay reduction, and the lack of substantial changes to her job duties meant she did not suffer an adverse employment action. The court also concluded that the comments and actions by her supervisors did not create intolerable working conditions that would force a reasonable person to resign. The plaintiff appealed.

To make a prima facie age discrimination claim, a plaintiff must demonstrate that he or she was age forty or older, was qualified for the job, and suffered an adverse employment action because of age.

To establish a claim of constructive discharge, a plaintiff must show that working conditions were so intolerable that they rendered a seemingly voluntary resignation a termination.

First Circuit Opinion

The First Circuit analyzed whether, in this case, the PIP qualified as an adverse action under federal antidiscrimination laws. In Muldrow v. City of St. Louis, the Supreme Court of the United States held that employees do not need to demonstrate significant harm to bring a discrimination claim based on an adverse action, such as a job transfer, pay cut, or demotion.

“Sometimes, an employer may issue a PIP to warn an employee about performance deficiencies or assist an employee in developing a plan to achieve an identified opportunity for skill development,” the First Circuit stated. “In those cases, a PIP is not an adverse employment action.”

But other times, “a PIP may impose new job responsibilities, change the present terms of employment, or deprive an employee of potential advancement opportunities,” the First Circuit continued. “In these situations, a PIP may serve as an adverse employment action.”

Therefore, the distinction hinges on the working conditions and the specific details of the PIP. The First Circuit concluded that the plaintiff’s PIP did not negatively affect the terms and conditions of her employment and did not qualify as an adverse employment action. While a loss of job responsibilities can be an adverse employment action, the court determined that did not happen in this case.

Regarding the constructive discharge allegation, the court found that the supervisor’s comments were not enough to demonstrate a work environment so onerous it would compel a reasonable person to resign. It also concluded that there was no evidence that the plaintiff was about to be fired before she resigned.

The First Circuit’s jurisdiction includes Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico.

Next Steps

This case shows that courts will use a fact-intensive and PIP-specific analysis to determine whether a decision to implement a PIP was a discriminatory act. If a PIP results in a change in the terms and conditions of employment, such as reduced hours, reduced pay, loss of job responsibilities, or undesirable assignments or locations, then it may be considered an adverse employment action. The plaintiff’s PIP did not change her job duties, pay, benefits, title, or worksite.

When a PIP is necessary, employers may wish to carefully document their reasons for implementing a PIP and use objective measures of performance in the PIP. Being consistent and fair in applying PIPs may reduce the risk of discrimination claims based on age, gender, or other legally protected characteristics.

Ogletree Deakins will continue to monitor developments and will post updates on the Employment Law, Maine, Massachusetts, New Hampshire, and Rhode Island blogs as additional information becomes available.

Lisa Stephanian Burton is a shareholder in Ogletree Deakins’ Boston office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• The DOL issued an NPRM that would require significantly higher wages for foreign workers using H-1B, H-1B, and E-3 visas, as well as PERM labor certification sponsorships.
• The purpose of the proposed rule is to better align prevailing wage levels with wages paid to similarly employed U.S. workers, strengthen program integrity, and reduce the incentive for employers to use these visa programs to replace U.S. workers by employing lower-paid foreign workers.
• The proposal would permit employers to continue using private wage surveys and other alternative wage survey data as an alternative to the four-tier Occupational Employment and Wage Statistics (OESW) survey data, preserving employer flexibility for specialized labor markets.  

The proposed rule, titled “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” invites written comments for a period of sixty days from the date of publication in the Federal Register. 

Background and Policy

Employers that wish to hire foreign workers in H-1B, H-1B1, or E-3 visa statuses, or seek to sponsor a foreign worker for an employment-based green card through PERM labor certification, are required to pay the foreign worker the prevailing wage for the specific occupation, level, and metropolitan statistical area in which the worker will be employed.

As part of the H-1B, H-1B1, and E-3 visa sponsorship processes, employers are required to obtain a certified labor condition application (LCA) from the DOL. The LCA must contain the employer’s attestation that it will pay the foreign worker the higher of either the actual wage level paid to all other similarly situated employees, “or the prevailing wage level for the occupational classification in the area of intended employment.” Similarly, an employer sponsoring a foreign worker in the second- or third-preference employment-based green card processes (EB-2 or EB-3) through a PERM labor certification application typically must obtain a prevailing wage determination (PWD) for the job opportunity from the DOL’s Office of Foreign Labor Certification’s (OFLC) National Prevailing Wage Center.

The DOL’s draft rule relies on data from the Occupational Employment and Wage Statistics (OEWS) wage survey to establish prevailing wage levels in both the LCA and PERM contexts. The OEWS program collects wage data nationwide and produces prevailing wage estimates annually for a variety of occupations and geographic areas. The OEWS survey employs a four-tiered wage structure that is intended to ensure that wages paid to foreign high-skilled workers meet given industry standards and do not depress wages of comparable U.S. workers.

The OEWS survey’s current four-tiered wage structure is based on calculations that approximate the following percentiles of the entire OES wage distribution.

Key Revisions Under the Proposed Rule

The DOL proposes to revise the computation of wage levels under its four-tiered prevailing wage structure. The policy behind the draft rule is to:

• “aim to better align prevailing wage levels with the wages paid to U.S. workers who are similarly employed in the occupation and area of intended employment;
• “seek to strengthen program integrity by reducing the incentive for employers to use these programs to replace, rather than supplement, U.S. workers by employing lower-paid alien workers”; and
• “enable the [DOL] to more effectively ensure that the employment of immigrant and nonimmigrant workers admitted or otherwise provided one of the covered statuses does not adversely affect the wages and working conditions of U.S. workers.”

The proposed rulemaking was prompted, in part, by Presidential Proclamation 10973, issued on September 19, 2025, which directed the secretary of labor to initiate rulemaking to revise H-1B prevailing wage levels, citing concerns that the program “has been deliberately exploited to replace, rather than supplement, U.S. workers with lower-paid, lower-skilled labor.” 

Proposed Prevailing Wage Changes

The DOL proposal would see substantial upward adjustments of the OEWS percentile levels used to set the four prevailing wage levels. Specifically, Wage Level I would increase from the current 17th percentile level to the proposed 34th percentile; Wage Level II would increase from the 34th percentile to the 52nd percentile; Wage Level III would increase from the 50th percentile to the 70th percentile; and Wage Level IV would see increases from the 67th percentile to the 88th percentile.

The resulting change in distribution is illustrated in the table below:

The DOL’s analysis found that the current methodology, in place since 2005, set prevailing wage tier levels too low by relying on the mean of the bottom third of the OEWS wage distribution for Level I (approximately 17th percentile), which includes many workers who would not qualify for specialty occupations under the Immigration and Nationality Act (INA).  The DOL’s statistical analysis of more than 3 million LCAs filed from FY2020–25 identified a gap of approximately $19,000 between the average OEWS mean wage for U.S. workers in the same occupations and locations as compared to the average prevailing wage assigned to LCA applicants. The proposed rule’s percentile adjustments are designed to eliminate this gap.

Estimated Impact on Employers

The proposed changes would result in significant wage increases across all four levels. These impacts would affect sponsorships for H-1B, H-1B1, and E-3 visas, as well as PERM labor certification cases in the EB-2 and EB-3 categories. Based on the DOL’s comparison of historical and proposed prevailing wages data from FY2020–24, the DOL estimates the proposed wage level adjustments would increase the average certified wage by approximately $14,000 per year per worker. 

The table below presents a comparison of historical and proposed prevailing wage levels:

Source: Proposed Rule

Use of Alternative Wage Survey Data and Private Wage Surveys

The DOL considered eliminating the ability for employers to use private wage surveys and other alternative wage survey data to establish the prevailing wage for H-1B, H-1B1, and E-3 LCAs or PERM labor certification cases. However, the draft rule proposes to retain—but monitor—the use of such private wage surveys and other alternative wage survey data in limited circumstances, preserving employer flexibility for specialized labor markets. 

According to the DOL, “[t]his approach preserves employer flexibility, mitigates potential adverse impacts on businesses operating in specialized labor markets, and balances reliance interests with the statutory mandate to protect U.S. workers. To ensure integrity, the DOL would monitor the use of private surveys to prevent abuse and ensure compliance, and it already reserves the right to reject any private survey that does not meet methodological standards or otherwise fails to satisfy regulatory requirements.” In discussing the elimination of private wage surveys as an alternative to revising the wage levels, the DOL acknowledged eliminating private wage surveys entirely could “disrupt longstanding compliance practices and impose disproportionate burdens on such employers.”

Timing and Impacts

The proposed rule would apply only to prevailing wage determination applications pending with the OFLC National Processing Center as of the effective date of the rule, as well as to new LCAs and PWD requests filed on or after that date. The rule would not be retroactively applied to previously approved PERM prevailing wage determinations, permanent labor certifications, or LCAs. 

The DOL invites written comments for a period of sixty days from the date of publication in the Federal Register, scheduled for March 27, 2026. The rule would not become effective until it has completed the formal notice-and-comment rule-making process, which typically takes several months, if not longer. Once the final rule is published, it would become effective a short period later, typically thirty to sixty days after publication. 

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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Quick Hits

• Under Section 241 (2) of the German Civil Code (Bürgerliches Gesetzbuch (BGB)), the employer is obligated to respond promptly upon becoming aware of deepfake incidents in the workplace; failure to do so may expose the employer to substantial claims for damages and compensation for pain and suffering.
• The creation and distribution of deepfakes with sexual or degrading content constitutes a serious breach of the duty of mutual consideration, which may regularly justify extraordinary termination pursuant to Section 626 (1) BGB.

In the workplace context, various scenarios are conceivable: the creation of deepfakes with sexual or degrading content depicting colleagues (whether using company or private IT infrastructure), deepfakes targeting supervisors to damage their reputation, and the use of deepfakes to manipulate business operations—for example, through forged instructions in audio or video form.

For those affected, such content can have severe personal and professional consequences—ranging from psychological distress to reputational harm to disruption of their daily work. For employers, the question arises as to how they can, on the one hand, fulfill their duty of care toward affected employees and, on the other hand, address the (alleged) perpetrators under employment law.

Employer’s Duty of Care

By virtue of the duty of care arising from Section 241 (2) BGB in conjunction with Articles 1 (1) and 2 (1) of the German Basic Law (Grundgesetz (GG)), the employer is obligated to protect the personal rights (Persönlichkeitsrechte) of its employees. If an employee becomes the victim of deepfakes and a workplace nexus exists, the employer must take active protective measures.

The principles developed by case law in the context of workplace bullying (Federal Labor Court (Bundesarbeitsgericht (BAG)), May 16, 2007, case no. 8 AZR 709/06) are likely transferable to this context. According to these principles, the employer has, among other things, an organizational duty to structure the workplace in a manner that safeguards personal rights. The employer is already obligated to act when it becomes aware—or should have become aware—of concrete indications of violations of personal rights. As with workplace bullying, the creation and distribution of deepfakes constitutes a serious violation of personal rights that can cause significant psychological distress.

Once the employer becomes aware of deepfake incidents, it must respond promptly. Measures to be considered include preventing further distribution (e.g., by blocking company IT systems), separating the perpetrator from the victim (e.g., through reassignment or paid leave), and imposing employment law sanctions up to and including extraordinary termination of the (suspected) perpetrator.

If the employer fails to take appropriate measures, it may face substantial claims for damages and compensation for pain and suffering from the victim. In addition, the affected employee may, for his or her part, terminate the employment relationship without notice pursuant to Section 626 BGB.

Furthermore, employers may want to take preventive action by, for example, explicitly addressing the use of AI in (ethics) guidelines. In this context, it is also important to consider the employer’s liability under the EU AI Act for the AI tools provided at the workplace.

Extraordinary Termination of the Perpetrator

Where it is established that an employee has created or distributed deepfake content depicting colleagues, extraordinary termination pursuant to Section 626 (1) BGB may be considered (cf. on bullying cases: Thuringia State Labor Court (LAG), February 15, 2001, case no. 5 Sa 102/00). The creation of deepfakes—particularly those with sexual or degrading content—constitutes a violation of the affected colleague’s personal rights and thereby a serious breach of the duty of mutual consideration under Section 241 (2) BGB, which—depending on its severity—may irreparably destroy the relationship of trust and sustainably disrupt workplace harmony.

In the balancing of interests—which is required before any termination is pronounced—the employer’s interest in terminating the employment relationship will generally prevail in cases of sexually motivated deepfakes, since the personal rights of those affected are violated at their core and the employer would otherwise breach its duty of care. The specific circumstances of the individual case—such as length of service, prior conduct, the nature of the content, and the extent of its distribution—must nonetheless be considered.

Where the identity of the perpetrator cannot be established beyond doubt, a termination based on suspicion may be considered. According to the settled case law of the Federal Labor Court, this requires that strong grounds for suspicion exist that are based on objective facts, that the employer has undertaken all reasonable investigative measures, and that the suspected employee has been given a proper hearing beforehand in order to present any exculpatory circumstances (BAG, November 29, 2007, case no. 2 AZR 724/06).

Particularly in the case of deepfakes, attributing the content to a specific employee frequently poses difficulties, as creation typically occurs on private devices. The employer may want to therefore carefully document the investigation and preserve IT forensic findings. In the case of a termination based on suspicion, the two-week filing period under Section 626 (2) BGB does not begin to run until the completion of all reasonable internal investigations, including the hearing of the employee, although the employer is generally required to proceed with due diligence and without undue delay.

Requirement of a Prior Warning

As a general principle, a conduct-based termination must be preceded by a formal warning in order to give the employee an opportunity to change his or her behavior. According to the case law of the Federal Labor Court, however, a warning is dispensable where the breach of duty is so serious that the employee could not have expected the employer to tolerate such conduct from the outset (BAG, May 20, 2021, case no. 2 AZR 596/20).

Where the allegation involves the creation and/or distribution of deepfakes depicting colleagues with sexual or degrading content, it appears justifiable to consider a prior warning dispensable. The creation of such content violates the core of the contractual duties of mutual consideration. Every employee must understand that such behavior will not be tolerated by the employer. Even if the creation or distribution occurs during the employee’s personal time, the workplace nexus and the associated potential harm should be readily apparent.

A different assessment may apply in borderline cases, such as manipulated content without a sexual dimension that is more in the nature of a tasteless joke. In such cases, a formal warning may come into consideration as a less severe measure, with the distinction depending in each individual case on the nature and severity of the content, the extent of distribution, and the impact on those affected.

In any event, workplace guidelines on AI use are likely to prove helpful at this juncture, ideally specifying which conduct may result in employment law consequences.

Pressure Termination

Where the workforce pushes for the dismissal of the perpetrator, the question arises as to the permissibility of a so-called pressure termination. However, this judicially recognized concept is subject to strict requirements. The Federal Labor Court distinguishes two categories of cases: where the pressure is based on an objectively justified ground for termination, the dismissal may already be effective as a standard conduct-related or person-related termination. Where no independent ground for termination exists, the employer must first protect the employee (alleged perpetrator) and take all reasonable measures to resist the pressure. Only if these measures fail and the threatened disadvantages for the employer render continuation of the employment relationship unreasonable may a termination for operational reasons be considered (BAG, October 4, 1990, case no. 2 AZR 201/90).

Where the creation of deepfakes has been proven, an independent ground for termination will generally already exist, such that the principles governing pressure terminations in the strict sense are not dispositive. The pressure from the workforce then merely serves as an additional indicator of a sustained disruption of workplace harmony.

The pressure termination becomes practically relevant above all where the identity of the perpetrator cannot be clearly established, but the suspicion is known within the workplace. In such cases, the employer must first de-escalate the situation through internal measures—such as reassignment or paid leave of the suspect—while at the same time safeguarding the rights of the accused. Only where all reasonable measures have been exhausted and the pressure reaches a level that seriously jeopardizes business operations (e.g., collective refusal to work) may a pressure termination be considered as a last and proportionate resort. However, the legal requirements for such a so-called ‘real’ pressure termination are high.

Conclusion

The employment law challenges posed by deepfakes will grow in significance as the corresponding AI tools become increasingly accessible. Employers may want to establish clear codes of conduct early on and to respond decisively to incidents. Existing case law on workplace bullying and sexual harassment provides helpful points of reference, even though the specific challenges of deepfake technology—particularly with regard to fact-finding and perpetrator identification—will require further development of existing legal principles.

Ogletree Deakins’ Berlin and Munich offices will monitor developments and post updates on the Germany and Technology blogs as additional information becomes available.

Tatjana Serbina is counsel in the Berlin office of Ogletree Deakins.

Pauline von Stechow, a law clerk in the Berlin office of Ogletree Deakins, contributed to this article.

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Quick Hits

• On March 18, 2026, the State Department added twelve countries to the visa bond program: Cambodia, Ethiopia, Georgia, Grenada, Lesotho, Mauritius, Mongolia, Mozambique, Nicaragua, Papua New Guinea, Seychelles, and Tunisia.
• The visa bond program now includes a total of fifty countries.
• The State Department expanded its list of designated ports of entry to include all commercial airports, including CBP preclearance locations.
• This measure is aimed at reducing visa overstays in the United States by requiring certain travelers to post a refundable bond, creating a financial incentive to follow visa rules.

The State Department expanded its visa bond pilot program in March 2026 to include a total of fifty countries. Twelve countries were added: Cambodia, Ethiopia, Georgia, Grenada, Lesotho, Mauritius, Mongolia, Mozambique, Nicaragua, Papua New Guinea, Seychelles, and Tunisia.

This program aims to reduce visa overstays by requiring visitors from subject countries to post a refundable bond, creating a financial incentive to comply with visa rules. Visa bonds for the countries added on March 18 will take effect on April 2, 2026.

Citizens or nationals traveling on a passport from any of the listed countries must post a bond of $5,000, $10,000, or $15,000 as a condition for issuance of a B-1/B-2 visitor visa, if approved. As an additional condition of the bond, travelers must enter and exit the United States through a commercial airport, including U.S. Customs and Border Protection (CBP) preclearance locations. Travelers subject to the bond program may not use charter air, general aviation, land, or seaports for entry to the United States.

The table below provides the fifty countries currently included in the pilot program.

See Ogletree’s detailed article for additional information on the visa bond pilot program.

Next Steps

Visitors to the United States applying for a B-1/B-2 visa should note the newly added countries to the State Department’s visa bond pilot program and ensure compliance with visa status, bond terms, and consular instructions. Noncompliance—such as incorrect entry points, overstays, or status changes—may trigger review by U.S. Citizenship and Immigration Services.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

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