The agency’s April 2024 final rule implementing the statute was not as widely applauded. Now that the EEOC has formally announced plans to revise that rule, employers should expect a narrower regulatory definition of what the PWFA covers. Employers need to read beyond headlines declaring protections will be rolled back and not expect any slowdown in enforcement on behalf of pregnant and newly postpartum workers who require basic accommodations to keep working.

Quick Hits

• The EEOC plans to revise its 2024 PWFA rule, with a proposal expected in November 2026 that may narrow the list of “related medical conditions” eligible for accommodation. The proposed rule may also broaden religious exemptions for employers, and may look at the definition of “near future.”
• A revised rule does not mean less enforcement. The EEOC continues to file actions to vindicate rights under the PWFA and its implementing regulations.
• Employers may want to consider training managers and human resources professionals on the PWFA, keeping clear and documented accommodation processes, and reviewing their policies.

Chair Lucas’s Dissent From the 2024 Final Rule

Then-Commissioner Lucas voted to disapprove the final rule on April 3, 2024. While she supported elements of the rule, she concluded that it “purports to broaden the scope of the statute in ways that … cannot reasonably be reconciled with the text.” In her words:

“At a high level, the rule fundamentally errs in conflating pregnancy and childbirth accommodation with accommodation of the female sex, that is, female biology and reproduction. The Commission extends the new accommodation requirements to reach virtually every condition, circumstance, or procedure that relates to any aspect of the female reproductive system.”

Her statement specifically criticized the rule’s definition of “pregnancy” as including “past pregnancy” and “potential or intended pregnancy (which can include infertility, fertility treatment, and the use of contraception),” warning that it “opens the door to requiring accommodations potentially extending to a myriad of conditions ranging from infertility to menstruation to hormone issues to menopause.” As she put it, “This is the Pregnant Workers Fairness Act after all, not the Female Workers Fairness Act.” In her view, the PWFA covers the limitations of an employee’s actual, specific pregnancy and childbirth, plus medical conditions caused or worsened by that pregnancy or childbirth.

In early 2025, as acting chair, Lucas reiterated her opposition to the rule’s construction of “pregnancy, childbirth, or related medical conditions.” She noted, however, that the Office of the Chair could not rescind or modify a final rule on its own under the Administrative Procedure Act.

The Inclusion of Elective Abortion as a Related Medical Condition Has Already Been Vacated

On May 21, 2025, in Louisiana v. EEOC, the U.S. District Court for the Western District of Louisiana vacated portions of the final rule that treated so-called “elective abortion” as a “related medical condition” and that required, or suggested that employers provide, accommodations for abortions not necessary to treat a medical condition related to pregnancy. The court sent the rule back to the EEOC for revision. The decision to have or not have an abortion remains protected under the Pregnancy Discrimination Act.

The EEOC’s Announced Revisions

With its quorum restored, the EEOC has now placed “Revisions to the Pregnant Workers Fairness Act Regulations” (RIN 3046-AB36) on the Unified Agenda at the proposed rule stage, designated as “economically significant.” The agenda entry states:

“The EEOC proposes to revise its existing regulations implementing the Pregnant Workers Fairness Act (PWFA) that requires covered entities to provide reasonable accommodations to a qualified worker’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause an undue hardship. Among other revisions, the EEOC proposes revising language in the regulations regarding the interpretation of the words ‘pregnancy, childbirth, or related medical conditions.’”

The agenda projects a notice of proposed rulemaking (NPRM) in November 2026, with comments due in January 2027. The proposal has not yet been published. Given Chair Lucas’s stated views, however, the EEOC can be expected to propose removing infertility, menstruation, use of birth control, and past pregnancy from the regulatory scope of “pregnancy, childbirth, or related medical conditions” and to tie coverage to an employee’s current pregnancy or childbirth, and the conditions caused or exacerbated by them. Until a revised rule is final, the 2024 rule stays in effect, minus the vacated abortion provisions.

The Core Obligation to Accommodate Pregnant and Newly Postpartum Workers Remains

Employers should not mistake a narrower definition for a retreat from enforcement. Chair Lucas has applauded the passage of the PWFA and has been clear that its core purpose is ensuring that pregnant women receive the “minor, simple, temporary accommodations” that help them keep working and stay in the workplace. The EEOC’s recent litigation and conciliation activity shows the agency is acting on that purpose. A common thread runs through these cases: the EEOC is targeting employers that fail to provide straightforward accommodations, fail to consider leave as an accommodation, direct pregnant workers to unpaid leave, apply rigid attendance or leave policies, deny pregnant workers access to light-duty assignments given to those with work-related injuries, or discharge workers after they ask for accommodation.

The following is a sampling of recent EEOC pregnancy matters:

• October 2026 settlement. An employee with pregnancy-related complications was allegedly told the company did not provide accommodations for pregnancy when she asked for an accommodation of a lifting restriction. She was then put on unpaid leave and was subsequently discharged. Outcome: The company agreed to pay $245,000 and entered into a two-year consent decree requiring PWFA accommodation procedures, manager and HR training, and reporting to the EEOC.
• September 2026 lawsuit. The EEOC brought suit against a nonprofit employer that allegedly refused to accommodate a temporary twenty-pound lifting restriction even though it routinely gave light duty to other employees with similar restrictions. Instead, it placed the employee on leave and fired her when that leave ran out shortly before her due date.
• September 2026 conciliation. An electronic equipment company allegedly reassigned a pregnant worker to operate machinery that used X-ray radiation, then terminated her employment rather than return her to her original role after her doctor said she should avoid radiation. The EEOC conciliated the charge, and the employer agreed to pay back pay, as well as undertake policy, recordkeeping, training, and reporting obligations.
• September 2026 conciliation. A nightclub and bar allegedly stopped scheduling a pregnant employee who had no medical restrictions and refused to consider reassignment. The EEOC conciliated the charge, and the employer agreed to pay back pay, as well as adhere to policy, recordkeeping, training, and reporting obligations.
• August 2026 class lawsuit. The EEOC brought suit against a manufacturer that allegedly refused light duty for pregnancy-related lifting restrictions while giving light duty for on-the-job injuries. One employee was allegedly told her doctor’s note was “not good enough” and was discharged from employment the next day. The employer also allegedly denied nursing mothers adequate break time and private space to pump.
• July 2026 lawsuit. The EEOC brought suit against a toy manufacturer that allegedly refused to excuse pregnancy-related absences under its attendance policy. The company also allegedly denied requests to sit briefly between assemblies, take more frequent breaks (e.g., restroom breaks and breaks to eat and drink), and avoid highly strenuous assemblies.

What Employers Can Do Now

Whatever the revised rule eventually provides regarding accommodations for infertility, contraception, or menstruation, the EEOC has indicated it is interested in enforcing the core of the PWFA: current pregnancies and recent childbirth. Employers may want to consider the following:

• Training managers and HR professionals on the PWFA. In recent EEOC litigation matters, frontline managers who refused accommodation requests outright or failed to recognize them have come into focus. EEOC officials have publicly said that many employers still have not adequately trained on the PWFA.
• Maintaining a clear accommodation process. Documenting requests, engaging in the interactive process promptly, and tracking outcomes can be beneficial. Several recent resolutions required exactly these recordkeeping mechanisms.
• Not defaulting to a leave solution. The PWFA prohibits requiring an employee to take leave when another reasonable accommodation would have let her keep working.
• Evaluating leave under the PWFA as an accommodation independent of the Family and Medical Leave Act (FMLA). An employee who is not FMLA-eligible may still be entitled to leave under the PWFA for a pregnancy-related condition or for recovery from childbirth.
• Reviewing light-duty and attendance policies. Policies that offer light duty only for workplace injuries, or that assess points for pregnancy-related absences, have been recurring targets.
• PUMP Act requirements and PWFA lactation accommodations. Break time and private space to express milk for nursing infants remain enforcement priorities for both the U.S. Department of Labor (as entitlements under the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act) and the EEOC (for accommodations under the PWFA).
• Monitoring the rulemaking. Watch for the NPRM and consider submitting comments during the comment period.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group and Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor the EEOC’s rulemaking and enforcement activity and will provide updates on the Diversity, Equity, and Inclusion Compliance, Employment Law, and Leaves of Absence blogs as additional information becomes available.

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Quick Hits

• New York’s Trapped at Work Act restricts the use of “stay or pay” agreements, which, as a condition of employment, require employees to reimburse an employer for certain expenses or costs if the employment relationship ends before a specified date.
• Repayment agreements that are not a condition of employment are permissible.
• The New York Department of Labor may issue fines ranging from $1,000 to $5,000 for violations of the Trapped at Work Act. There is no private right of action under this law.
• The law will take effect on December 19, 2026.

The NYSDOL’s recently released guidance clarifies the following key issues:

• Existing agreements are not covered: The law applies only “to new agreements, or new or amended terms in existing agreements, entered into on or after December 19, 2026.” Thus, if an agreement is entered into before December 19, 2026, even if the repayment obligation arises after December 19, the agreement is exempt from the law (assuming the agreement is not modified after December 19.)
• Only agreements that are a condition of employment are banned: The law applies only to agreements that require, as a condition of employment, that an employee or applicant pay the employer back if the employment relationship ends before a specific time period. Significantly, this means voluntary agreements and agreements that are not entered into as a condition of employment are not covered by the law.
• Bonus, relocation and other payments not tied to job performance are permissible: Agreements to repay a sign-on bonus, relocation assistance, or other noneducational incentives, payments, or benefits that are not tied to specific job performance are allowed, unless the employee was dismissed for “other than misconduct or the duties or requirements of the job were misrepresented to the employee.” As long as the job was accurately described to the employee, the employer may still require repayment where an employee voluntarily departs or when termination is for misconduct.
• Education and credentialing costs may be recoverable: Agreements to reimburse the employer for the cost of general education or transferable credentials are permissible as long as:

• the agreement is set forth in a written contract that is offered separately from any contract for employment;
• the agreement does not require the employee to obtain the transferable credential as a condition of employment;
• the agreement specifies the repayment amount before the employee agrees to the contract, and the repayment amount does not exceed the employer’s cost for tuition, fees, and educational materials;
• the agreement provides for a prorated repayment amount that is proportional to the total repayment amount and the length of the required employment period and does not require an accelerated payment schedule if the employee separates from employment; and
• the agreement does not require repayment to the employer if the employee is fired, except when the employee is fired for misconduct.

The guidance defines “transferable credentials” as “any degree, diploma, license, certificate, or documented evidence of skill proficiency or course completion” that employers widely recognize in a relevant industry and that “provides skills or qualifications that demonstrably enhance the employee’s employability with other employers in the relevant industry.” Employer-specific training and mandated safety and compliance training do not qualify as transferable credentials.

• Collective bargaining agreements and sabbaticals:Agreements entered into as part of a program agreed to by an employer and a union in a collective bargaining agreement are permissible, as are agreements requiring educational personnel to comply with any terms or conditions of sabbatical leave granted by their employer.

Next Steps

Employers in New York may wish to review their policies and practices regarding “stay or pay” agreements and update them as needed to comply with the new law before December 19, 2026. Employers also may want to consider reviewing and updating job advertisements and job descriptions to help ensure that jobs are accurately described to applicants and employees.

Ogletree Deakins’ New York offices will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation and New York blogs as additional information becomes available.

Joseph B. Cartafalsa is a shareholder in Ogletree Deakins’ New York office.

Michael K. Mahoney is a shareholder in Ogletree Deakins’ Morristown 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

•  Courts and labor authorities outside of the United States often look at how compensation is paid in practice, and local statutory entitlements can override the plan terms entirely.
• Bonus terms that are consistently applied year after year can become contractual entitlements that are difficult to change or withdraw.
• In some countries, such as China, offering actual equity can be impractical or restricted, and companies often use phantom equity (cash-settled awards) as a workaround.
• Referencing U.S. parent equity in a local employment contract can create joint employment or co-employer risk.
• Commissions may need to be factored into vacation pay, termination and end-of-service payments, and other leave entitlements—often based on average earnings over a reference period.

The Fundamental Differences Between Compensation Plans

In the United States, plan documents and at-will employment give employers considerable flexibility. Internationally, that flexibility often disappears.

The key international principle is this: What a plan document says is not always what local law will enforce. Courts and labor authorities often look at how compensation is actually paid in practice, and local statutory entitlements can override the plan terms entirely.

U.S. employers generally have broad discretion to design, amend, and terminate incentive plans, and well-drafted plan documents are usually enforced as written. Internationally, the picture is different. Many jurisdictions treat variable pay as part of the employee’s remuneration, protect acquired rights, and require that variable pay be included in the calculation of statutory entitlements. A plan that works in the United States may create unexpected liabilities when rolled out globally without local review.

Bonus Plans: The Payout Date Is Not Always the Deciding Factor

Many U.S. bonus plans require that the employee be actively employed on the payout date to receive a bonus. In a number of jurisdictions outside the United States, that condition may not be enforceable—or may be enforceable only in limited circumstances. Where a bonus is viewed as compensation for work already performed during the bonus period, employees who leave before the payout date, particularly where the employer terminates the relationship, may be able to claim the full bonus or a pro-rated portion of it, notwithstanding the plan language.

A related risk is the concept of acquired rights or implied terms. Where a bonus has been paid consistently, on the same basis, year after year, courts in many countries may treat it as an established term of employment—even where the plan describes it as discretionary. Once that happens, it can be difficult to reduce, change, or withdraw the bonus without employee consent, consultation, or a compensatory payment. Clearly and repeatedly communicating the discretionary nature of bonuses, having a new bonus plan issued every year, varying the criteria where appropriate, and documenting that each award is a one-time decision can be helpful tools in avoiding the presumption that bonus terms are immovable.

Equity: Who Issues the Stock, and Where It Is Mentioned, Matters

Equity awards are a core part of compensation for many U.S. companies, but they do not always translate abroad. In some countries, offering actual equity to local employees is restricted or impractical due to exchange controls, securities rules, or registration requirements. China is a common example. In these jurisdictions, companies often use phantom or ghost equity as a workaround—awards that track the value of the company’s stock but are settled in cash rather than shares. Phantom plans raise their own issues, including tax treatment, payroll withholding, and whether the cash payments become part of the employee’s salary for other purposes.

In addition, which entity is issuing the stock—whether the parent company or a subsidiary—is an important matter for U.S. employers. Equity is typically granted by the U.S. parent, while the employee is employed by a local subsidiary. If the local employment contract promises or describes the parent’s equity awards, the employee may argue that the parent is a joint employer or co-employer—potentially exposing the parent to local employment claims and making the equity award part of the employee’s contractual remuneration. In some cases, it may be advisable not to refer to equity in the employment contract at all, and instead to reference it only in a separate side letter or award agreement issued directly by the U.S. parent, making clear that participation is governed by the parent’s plan and is not part of the local employment relationship.

Commission Plans: The Ripple Effect on Other Benefits

Commission plans can have consequences well beyond the commission payment itself. In many jurisdictions, commissions are treated as part of the employee’s regular remuneration and must be taken into account when calculating vacation pay, termination indemnities, end-of-service payments, and other leave entitlements. The calculation is often based on the employee’s average earnings—including commissions—over a defined reference period, such as the preceding three or twelve months.

The practical consequence is significant: An employer that budgets only for the commission payments themselves may materially underestimate the true cost of a commission plan, and may face underpayment claims for vacation pay or severance if the local rules are not followed. Employers should understand these rules before offering commissions in a new jurisdiction, and build them into payroll processes from the outset.

A 2026-Ready Strategy

U.S.-based multinational employers rolling out global compensation plans covering employees working outside the United States may want to ensure those plans:

• are reviewed locally to confirm whether payout-date and active-employment conditions are enforceable;
• clearly document the discretionary nature of bonuses to reduce acquired rights risk;
• confirm whether equity can be offered in each country and use phantom or cash-settled alternatives where it cannot;
• keep equity references out of local employment contracts where appropriate, using a side letter from the U.S. parent to manage co-employment risk; and
• account for the impact of commissions on vacation pay, termination and end-of-service payments, and other leave entitlements before commission plans are introduced.

Compensation plans have local rules. Payout conditions, past practice, equity restrictions, and statutory benefit calculations can all override the terms of a well-drafted U.S. plan.

A global compensation template cannot absorb the complexity of international employment law. A global compensation strategy can.

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

Shirin (Aboujawde) Gudgin is a shareholder in the New York office of Ogletree Deakins, and a partner in the firm’s London office.

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

While this article focuses on employment considerations when looking to execute certain compensation programs, there are many other factors to keep in mind, particularly international tax implications. Employers will want to consult their own international tax consultants on all of these matters.

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Quick Hits

• In Commonwealth Department of Labor and Industry v. Accuserv Pharmacy, the Commonwealth Court of Pennsylvania reversed a trial court’s ruling in favor of twenty employees who sued for unpaid overtime wages.
• The appellate court found the trial court erred in determining that a six-year statute of limitations applied to the employees’ claims.
• The three-year statute of limitations had been commonly accepted by practitioners and judges throughout Pennsylvania.

In 2023, Pennsylvania’s Department of Labor and Industry sued two pharmacies, Accuserv Pharmacy and North Huntingdon Medical, to recover unpaid overtime for twenty employees for work performed between 2017 and 2019. The employees were pharmacy technicians and clerical workers who allegedly qualified for overtime pay. The employers argued that their claims were filed too late, assuming a statute of limitations of three years.

The Pennsylvania Minimum Wage Act (PMWA) contains a three-year record retention requirement, but not a statute of limitations. The Pennsylvania Wage Payment and Collection Law (WPCL) contains a three-year statute of limitations, but not a record retention mandate. Meanwhile, the state’s Judicial Code includes a catch-all six-year statute of limitations for all claims not covered by a different, more specific limitations period.

In June 2024, a Pittsburgh-area trial court reasoned that the six-year statute of limitations applied in this case because an explicit statute of limitations is not listed in the PMWA. The appellate court disagreed, finding that the PMWA and the WPCL “operate as a unified scheme and must be read harmoniously as one statute,” under the legal principle of in pari materia, meaning multiple laws on the same subject matter. The appellate court reversed the trial court’s order denying the employer’s motion for judgment on the pleadings.

In Pennsylvania, workers frequently sue for unpaid wages under the PMWA and the WPCL at the same time.

Next Steps

Employers can breathe a slight sigh of relief, knowing the appellate court’s decision confirms that employees claiming unpaid wages have only up to three years to file suit, not six years. This is especially important because the PMWA is often more employee-friendly than its federal counterpart, the Fair Labor Standards Act (FLSA). For example, Pennsylvania does not follow the federal Portal-to-Portal Act. That means all time an employee is required to be on an employer’s site is generally compensable under Pennsylvania law (with a narrow exception for time on premises solely for the employee’s convenience).

Under the PMWA, employees may sue for unpaid wages and collect damages consisting of back wages, statutorily mandated attorneys’ fees, and pre-judgment interest. Similarly, employees filing lawsuits under the WPCL can collect similar damages plus liquidated damages equal to 25 percent of the total unpaid wages due or $500, whichever is greater. While employers are still at great risk for PMWA violations, a three-year statute of limitation provides employers with much less exposure than a six-year statute of limitations.  

Ogletree Deakins’ Philadelphia and Pittsburgh offices and Wage and Hour Practice Group will continue to monitor developments and will post updates on the Class Action, Healthcare, Pennsylvania, and Wage and Hour blogs as additional information becomes available.

Lee E. Tankle is of counsel in Ogletree Deakins’ Philadelphia 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’s Employee Benefit Security Administration (EBSA) recently released final rules requiring more financial transparency and disclosures from PBMs to health plans.
• The rule’s purpose is to give large employers and plan fiduciaries more information to evaluate their contracts with PBMs and affiliated brokers and consultants.
• The regulations are applicable to plan years beginning on or after July 1, 2027.

The final regulations will require both initial disclosures ahead of a service agreement being executed and ongoing disclosures every six months or, if requested, quarterly. The regulations also include specifics regarding disclosure of spread compensation by PBMs and fees and other payments that flow to other entities, including rebate aggregators.

PBMs negotiate discounts and rebates for prescription drugs, maintain coverage tiers for drugs in health plans, build pharmacy networks, process claims, and set reimbursement rates for pharmacies. The new regulation requires PBMs to disclose conflicts of interest and clarify their fiduciary role and authority to change a health plan’s drug formulary.

The regulation applies to PBMs expecting to receive more than $1,000 for services provided to self-insured health plans that are governed by the Employee Retirement Income Security Act (ERISA) and have at least one hundred plan participants. It generally will not apply to small or midsized employers that have fully ensured health plans not covered by ERISA.

The final rules implement Executive Order 14273, which directed the DOL to propose regulations to “improve employer health plan fiduciary transparency into the direct and indirect compensation received by pharmacy benefit managers.”

Health plans will be entitled to get an audit from an auditor of their choice and information necessary to meet their legal obligations to ensure that vendor compensation is reasonable. ERISA section 408(b)(2)(A) mandates that service contracts or arrangements must be reasonable, the services must be necessary for the establishment or operation of the plan, and no more than reasonable compensation may be paid for the services. Under the Consolidated Appropriations Act of 2021, PBMs must provide specified disclosures to health plans for the services contract to meet the reasonableness condition.

The disclosures must occur every six months (or quarterly if the plan requests it) and within ninety days of a contract renewal. PBMs will be required to disclose any use of spread pricing, which happens when the PBM charges a health plan a higher price for a drug than what it paid to reimburse the dispensing pharmacy.

Under the Consolidated Appropriations Act of 2026, for plan years beginning on or after August 3, 2028, PBMs must pass through 100 percent of drug manufacturer rebates and discounts to the group health plan. A new amendment, ERISA section 726, will require additional, retrospective disclosures by PBMs regarding drug spending and drug utilization, effective for plan years beginning on or after August 3, 2028.

Key Takeaways

Large employers with self-funded health plans may expect to see more disclosure of pricing and manufacturer rebate information that previously was not disclosed by PBMs.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation and Healthcare blogs 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.

Timothy J. Stanton is a shareholder in Ogletree Deakins’ Chicago 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 role of HR in disciplinary proceedings is generally to guide the process and provide advice to the managers taking the decisions. In most situations, HR will not participate in taking the final decision.
• Nevertheless, cases are fact-specific, and someone from HR taking the decision in a disciplinary process does not automatically render a dismissal unfair.

Background and Analysis

In Shing v University of the Arts London, WYC Shing, a senior lecturer, was summarily dismissed for gross misconduct following findings relating to an inappropriate relationship with a mature student. He brought claims against his employer alleging unfair dismissal and race discrimination.

Counsel for Shing, relying on Ramphal v Department for Transport (2015), which restricted HR’s involvement to questions of law, procedure, and consistency, argued that HR’s involvement in Shing’s dismissal had rendered it unfair. Dismissing Shing’s appeal, the EAT held that the significance of HR’s involvement in a dismissal depended on the facts of the case. The EAT saw “no reason why in an appropriate case HR should not advise on the application of the suitability of the concepts of misconduct and serious misconduct and the dividing line between them, not least because otherwise it would be difficult for a company to maintain consistency of application between different persons who carried out dismissals.”

The EAT held that Ramphal does not establish that HR’s role as decision taker on a dismissal automatically renders the dismissal unfair. In fact, the EAT noted that HR plays a valuable role in keeping disciplinary decisions consistent across an organisation.

Key Takeaways

• In the UK, a manager typically takes the final decision in a disciplinary process, and HR’s role is to guide and advise the manager.
• A tribunal may weigh HR’s influence when assessing a dismissal’s fairness, particularly where it may amount to undue pressure on the decision maker. The EAT found no such pressure in the Shing case.
• HR may properly advise managers on whether conduct amounts to misconduct or serious misconduct, but the decision to dismiss rests with the manager.
• This is not an absolute rule and someone from HR can be assigned decision maker in appropriate cases.

Ogletree Deakins’ London office and Cross-Border and Global Reorganizations practice groups will continue to monitor developments and will provide updates on the Cross-Border and Global Reorganizations blogs as additional information becomes available.

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Midterms Preview: What You Need to Know. The 2026 midterm elections will take place on November 3, 2026. When the votes are tallied, the Buzz will provide a full analysis of what the results portend for labor, employment, and immigration policy in the 120th Congress. In the meantime, here are the key details heading into Election Day:

The U.S. House of Representatives

• All 435 members of the U.S. House of Representatives are up for election.
• Republicans currently hold a 220-to-215–seat majority in the House. This includes one independent, Kevin Kiley of California’s 3rd congressional district, who currently caucuses with the Republicans, as well as a vacant Republican seat and a vacant Democratic seat.
• Democrats need to hold their number and flip three Republican seats to gain the 218 needed for a majority in the House.
• If history is a guide, the Republicans will lose their majority in the House. Since 1934, the president’s party has lost an average of 26 House seats in each midterm election. During that timeframe, the only midterm elections in which the president’s party gained seats were in 1934 (President Franklin D. Roosevelt—a gain of 9 seats); in 1998 (President Bill Clinton—a gain of 4 seats); and in 2002 (President George W. Bush—a gain of 8 seats).
• In the 2018 midterm elections, President Trump witnessed a loss of 41 Republican seats.

The U.S. Senate

• In the U.S. Senate, there are 33 seats up for election and 2 seats up for special election. In those special elections, Republican incumbents Jon Husted (OH) and Ashley Moody (FL) are running to complete the Senate terms vacated by Vice President J.D. Vance and Secretary of State Marco Rubio, respectively. Both terms run until 2028. Husted is opposed by former U.S. senator Sherrod Brown (D-OH); Moody is running against former Democratic Florida state representative Angie Nixon.
• Currently, Republicans hold a 53–47 majority in the Senate. This includes independents Bernie Sanders (VT) and Angus King (ME), who caucus with the Democrats.
• Because Vice President J.D. Vance would break any ties in a 50–50 Senate, Democrats need to flip four seats to win the majority.
• Historically, Senate midterm results are less predictable than House results. Senators serve staggered six-year terms, so only about one-third of the chamber is on the ballot in any given federal election year. As a result, Senate races are not viewed as a referendum on the president’s performance in the way House races are.
• In his first term of office, President Trump saw a gain of two Republican seats in the Senate in the 2018 midterm elections.

What’s at Stake?

• Control of the Senate and/or House is the obvious answer, but what does this mean with President Trump in the White House for two more years? In the unlikely event that Republicans are able to hold the majorities in both chambers, they can drive the federal legislative agenda for the next two years and position themselves for the 2028 elections (though as the last two years have demonstrated, passing legislation is always challenging, even with unified control of Congress).

The more likely scenario, however, is that Democrats will win a majority in the House, and potentially the Senate, as well. Democrats will then oversee the various legislative committees and will lean heavily into their oversight authority, knowing that a presidential veto may await most legislation. Even then, Democrats may try to advance legislation to drive the political narrative and serve as litmus tests for 2028.

What’s Next?

• Several weeks remain in the 119th Congress before the 120th convenes. Members of both chambers are scheduled to return to Washington, D.C., on November 9, 2026, for a five-week lame-duck session. The top priority will be funding the federal government beyond December 11, 2026. How lawmakers keep the government open will depend largely on whether power shifts in either chamber in 2027 and on the political leverage that comes with it.

Spooky Season: Senate Pays Tribute to Bats. Prior to absconding from Washington, D.C., for the campaign trail, on September 30, 2026, the U.S. Senate agreed to S. 941, designating this week (October 24, 2026, to October 31, 2026) as “Bat Week.” Bats and Halloween may go together like ghosts and goblins, but Bat Week has nothing to do with the holiday. Rather, the resolution praises bats for “controlling damaging insect pests, pollinating plants that produce fruits and vegetables, dispersing seeds to ensure healthy functioning forests and fields, and saving farmers in the United States more than $3,700,000,000 in pest control every year.” The resolution further warns of the presence of “white-nose syndrome, a fungal disease that has killed millions of bats in North America, has now spread to 41 States and 12 species of hibernating bats.” The resolution concludes with a vow to work to conserve bat species and defeat white-nose syndrome. Clearly, the bat community has hired some good lobbyists.

Next week, the Buzz will be at Ogletree’s Corporate Counsel Exclusive in La Quinta, California, and will be on hiatus. We will return on November 13 with a full analysis of the midterm elections’ impact.

Quick Hits

• New York law requires employers to give workers paid time off to vote when there is not enough time before or after a shift to vote.
• The First Amendment of the U.S. Constitution generally does not prevent private employers from firing or disciplining a worker for political speech that violates a company policy.
• The National Labor Relations Act protects employees’ speech that relates to the terms, conditions, and benefits of employment, which sometimes overlaps with political speech.

Time Off to Vote

The New York Election Law, Section 3-110, governs when a New York employer must give employees paid time off to vote. Employers must provide up to two hours of paid time off to vote, but only if the employee does not have sufficient time outside working hours to vote. The law provides that an employee has sufficient time to vote if there are four consecutive hours between the opening of the polls and the start of the employee’s shift, or between the end of the shift and the closing of the polls.

Polls in New York are open from 6 a.m. to 9 p.m. on Election Day. For a 9 a.m. to 5 p.m. workday, an employee is not entitled to paid time off to vote because the employee has four hours after the end of the shift to vote. However, employees who work a 9 a.m. to 6 p.m. shift, for example, must be given (if requested) one hour paid time off to vote as the pools are open only three hours before and three hours after their shift.

An eligible employee who needs time off to vote must notify the employer at least two, but not more than ten, working days before the election. Employers may want to review any company policies or collective bargaining agreements that may provide additional rights.

Captive Audience Meetings

New York enacted a law in 2023 banning mandatory workplace “captive audience” meetings. Under this law, employers in New York may not fire, discipline, threaten, or retaliate against any employee who refuses to attend employer-sponsored meetings, or listen to or read communications, where the primary purpose of the meeting or communication is to share the employer’s opinion on politicalor religious matters. “Political matters” is defined broadly to include elections, political parties, legislation, regulation, and the decision to join or support a labor organization.

The captive audience meeting law has been challenged as being preempted by the National Labor Relations Act, as it applies to union-related speech, so this is a challenge that may be resolved in litigation.

Legal Activities Law

The New York Legal Activities Law, New York Labor Law Section 201-D, protects employees who engage in certain recreational or political activities outside of working hours. The law covers “matters relating to elections for political office, political parties, legislation, regulation and the decision to join or support any political party or political, civic, community, fraternal or labor organization.” This includes running for public office, campaigning for a candidate for public office, and participating in fundraising activities for a candidate, political party, or political advocacy group. While the definitions are relatively narrow under the law, some courts have broadly construed the law to mean most political speech is protected.

Comments on social media often occur while the employee is off duty, so such comments may be legally protected. In some cases, attending rallies or making social media posts promoting a politician or a government policy may be considered a protected recreational or political activity.

Employers can fire or discipline an employee if his or her conduct or speech creates a material conflict with business interests. For example, a conflict of interest may occur when an employee’s conduct reveals trade secrets or causes the employer to lose lucrative contracts, clients, or customers. Case law is not clear on whether an employer would have to prove actual harm or simply the potential for harm caused by an employee’s conduct or speech.

Federal Laws

The free-speech protections under the First Amendment of the U.S. Constitution generally apply to government entities, but not to private employers. Private employers can legally maintain workplace policies prohibiting speech that is offensive, harassing, abusive, threatening, defamatory, or harmful to the employer’s business interests.

At the same time, private employers must comply with the National Labor Relations Act (NLRA), which protects employees’ right to participate in concerted activity related to working conditions, which may include discussing politics. For example, workers criticizing a workplace policy that they feel is unfair or discriminatory based on religious or political beliefs would most likely qualify as protected concerted activity. However, getting into a fistfight over political differences with a coworker is not protected.

On September 23, 2026, the National Labor Relations Board (NLRB) restored a more employer-friendly standard for determining when certain conduct is protected concerted activity. Applying that standard will depend on the specific facts, including whether the employer can identify the misconduct, connect the related discipline to a neutral workplace rule, and show consistent treatment of similar misconduct outside the protected-activity context.

Ogletree Deakins’ Employment Law Practice Group and New York offices will continue to monitor developments and will post updates on the Employee Engagement, Employment Law, Leaves of Absence, and New York blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on state and federal laws around Employer Political and Religious Speech and Employee Lawful Off-Duty Conduct, including in New York. Premium-level subscribers have access to comprehensive law summaries, policies, and templates. Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

Joseph B. Cartafalsa is a shareholder in Ogletree Deakins’ New York 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

• Under a new California law taking effect July 1, 2027, employers may not rely solely on an automated decision system when making discipline or termination decisions.
• When an employer primarily relies on an AI-powered tool output for such decisions, a human must corroborate the result.
• The law further requires employers, after primarily relying on a covered tool to make such decisions, to provide affected employees a written “postuse” notice.

Senate Bill (SB) 947 adds Part 5.5.5 to the California Labor Code, governing “Automated Decision Systems in the Workplace.” The signing of SB 947 comes after Governor Newsom’s 2025 veto of a broader predecessor bill. While SB 947 is narrower, it still imposes significant new process requirements and litigation exposure on employers that use algorithmic tools to manage their workforces. The law takes effect on July 1, 2027, meaning employers need to start preparing for compliance.

Covered Tools

SB 947 applies to “automated decision systems,” broadly defined as “any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons.” (Emphasis added). “Artificial intelligence” is defined as “an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.” The statute expressly excludes spam filters, firewalls, antivirus software, identity and access management tools, calculators, databases, and datasets.

That definition reaches well beyond generative AI. Productivity scoring tools, attendance analytics, performance trackers, and customer-rating systems could all potentially qualify as a covered automated decision system (ADS) if they produce scores or recommendations that factor into employer personnel decisions. “Employer” also includes public entities, labor contractors, and farm labor contractors.

Human-Review Requirement and Prohibited Uses

The core of SB 947 is a two-tier standard for discipline and termination. First, the law expressly prohibits employers from “rely[ing] solely on an ADS” in making a “disciplinary or termination decision.” (Emphasis added). Second, if an employer “primarily relies” on ADS output, the employer must “direct a human to corroborate the decision using the data that was collected or used to produce the ADS output or other relevant corroborating or supporting information.” (Emphasis added). Such information includes supervisory evaluations, personnel files, employee work product, peer reviews, or witness interviews (which may include relevant online customer reviews).

An employer that “primarily relies” on the output of a covered ADS to make a disciplinary or termination decision must direct a human to corroborate the decision using the same information as the ADS.

• If the output cannot be corroborated, or the reviewer concludes it is “inaccurate, incomplete, or misleading,” the employer may not use it to make a disciplinary or termination decision. Notably, the statute does not define “primarily relies,” a gap that will likely be tested in litigation.
• Upon an employee’s request, an employer must provide a “meaningful, objective description of” the data used by the ADS.

The law further expressly prohibits the use of ADS to “prevent compliance” with federal, state, or local laws, or with other occupational health and safety, employment, or civil rights laws and regulations (ostensibly the California Fair Employment and Housing Act (FEHA)). Further, ADS cannot be used to “predict or take adverse action against” workers for exercising their legal rights, including those under state and federal labor law (ostensibly the National Labor Relations Act (NLRA)).

Employee Data Access Rights

When an employer has “primarily used an ADS to make a disciplinary or termination decision,” employees have the right to request, and the employer must provide, “a meaningful, objective description of the employee’s own data” used by the system. Any description must anonymize the personal information of customers, coworkers, and other individuals.

‘Postuse’ Notice of ADS Use

SB 947 further adds stringent notice requirements when an employer primarily relies on an ADS to make (i.e., “postuse”) decisions regarding discipline and termination of employment. Employers must provide a written postuse notice when informing the employee of the decision. The notice must be a plain-language, stand-alone communication, delivered in the language of routine workplace communications, and delivered via a simple method such as email or hyperlink. The notice must state:

1. that the employer primarily relied on an ADS,
2. that a human reviewed the decision and corroborated the output,
3. contact information for a person who can answer questions and explain the employee’s data-access right, and
4. that retaliation for exercising rights under the law is prohibited.

Notably, the notice obligation is tied to discipline and termination decisions in which an ADS was the primary basis, not to every employment decision involving an ADS.

Enforcement and Penalties

SB 947 does not create a standalone private right of action. Instead, the labor commissioner may investigate, order temporary relief, issue citations, and file civil actions. Violators face a $500 civil penalty per violation. Additionally, public prosecutors (i.e., the California attorney general, local district attorneys, city attorneys, county counsels, or any other city or county prosecutor) may also enforce the law through civil actions. They may seek injunctive relief, punitive damages, and reasonable attorneys’ fees and costs. Since the law sits in the Labor Code and carries civil penalties, employers may face attempts to enforce claims under California’s Private Attorneys General Act (PAGA), which allows employees to enforce labor code violations on their own behalf and on behalf of other employees.

The law establishes a burden-shifting framework for proving violations of the employer requirements. Once it is shown that an ADS was used to make a disciplinary or termination decision, the employer must show that it “did not primarily rely” on an ADS or that the employer fully complied with the human-review and notice requirements.

The law explicitly exempts employers and employees covered by a collective bargaining agreement (CBA) if the agreement:

1. “explicitly waives” the new requirements “in clear and unambiguous terms,”
2. “expressly provides for the wages or earnings, working conditions, and other terms and conditions of work,” and
3. protects against “algorithmic discrimination.”

Interplay With Other Laws

SB 947 comes as California has moved to the forefront in regulating AI and its use in many contexts, including workplaces, amid federal inaction. The law was one of several signed by Governor Newsom in the latest legislative session, including laws restricting the use of AI-driven workplace monitoring tools to track employees’ behavior and predict their emotional state. Additionally, Governor Newsom recently signed two more executive orders related to AI, including one aimed at exploring whether to require a “kill switch” for frontier AI models.

This latest wave of actions follows California’s adoption of regulations regarding AI and ADS in the workplace, through FEHA in the antidiscrimination context, and privacy mandates such as the California Consumer Privacy Act (CCPA). Beyond California, Colorado, Connecticut, Illinois, New York City, and Texas all have laws that restrict the use of automated decision-making tools for significant or consequential employment decisions, such as hiring, promotion, and termination.

Compliance with SB 947’s notice requirements satisfies substantially similar ADS notice provisions under other state laws. However, that safe harbor does not extend to warehouse quotas or other automated working-condition standards, nor does it exempt CCPA-covered businesses from the California Privacy Protection Agency’s automated decision-making regulations.

Next Steps

With the July 1, 2027, effective date approaching, employers may want to consider inventorying potentially covered ADS tools used, particularly any system that generates scores or rankings or flags actions or makes recommendations regarding discipline or termination, including vendor products embedded in human resources platforms, and assess how such tools are used and whether human review is part of the process of decision-making. Employers may also want to prepare postuse notice templates, establish processes for handling employee information requests, and train managers on the new requirements under SB 947, as well as other state laws and regulations.

Ogletree Deakins’ Artificial Intelligence and Innovation Practice Group will continue to monitor developments and will provide updates on the Artificial Intelligence and Innovation, California, and Cybersecurity and Privacy blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on California state laws, including California’s updated laws on Automated Employment Decisions. Premium-level subscribers have access to comprehensive law summaries, policies, and templates. Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

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Quick Hits

• In Elshabrowy v. Ali Awad Law, P.C., a federal district court recently adopted a magistrate judge’s conclusion that sexual harassment under the NYSHRL and NYCHRL includes unwelcome verbal or physical behavior based on a person’s gender, even if the conduct is not sexual or lewd in nature.
• Because the employee plausibly alleged a gender-based hostile work environment, the case qualified as a “sexual harassment dispute” under the EFAA, and the court denied the employer’s motion to compel arbitration of the entire case.
• Rather than treating sexual harassment as a narrow subset of gender discrimination, the decision suggests that many gender discrimination and hostile work environment claims involving verbal or physical conduct may be treated as sexual harassment claims that are exempt from arbitration.

Under the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), an employer cannot enforce an arbitration agreement in a case relating to a sexual assault dispute or sexual harassment dispute. The EFAA defines a “sexual harassment dispute” as a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law. The NYSHRL and the NYCHRL both prohibit gender discrimination, but neither statute expressly defines “sexual harassment” or says when gender-based discrimination rises to the level of sexual harassment.

Background on the Case

A Muslim woman of Arab descent worked remotely from her home in Queens, New York, for a personal injury law firm and an affiliated company from August 2024 until her termination of employment in October 2025. She alleged that after she began wearing a hijab to work in January 2025, a company executive expressed discomfort toward her hijab, stalled her projects, interfered with her administrative access at work, yelled at her, and called her and her team “incompetent.” After she told the CEO, she said the CEO called her “emotional” and suggested she needed to accept typical male “aggressive” behavior from the executive.

After she raised her concerns again, the executive allegedly cursed at her, told her she was “embarrassing” herself, and said, “You’re not the most intelligent person in the room”—comments she alleged he did not direct toward male employees. She also alleged that she was excluded from company-organized carpools to Friday prayers that were routinely offered to Muslim men. She filed a formal complaint with human resources in June 2025, alleging repeated verbal abuse and harassment. She alleged that HR did not respond to or investigate her complaint, and the employer terminated her employment several months later.

In December 2025, the former employee sued in New York State Supreme Court, Queens County, alleging gender and religious discrimination under the NYCHRL and NYSHRL, as well as state law tort claims of defamation and intentional infliction of emotional distress. The employer removed the case to federal court and moved to compel arbitration under the employee’s employment agreement. The employee argued that the EFAA barred arbitration because she alleged sexual harassment under state and local law. The employer responded that, even if her allegations were true, they did not plausibly allege sexual harassment under either law.

The Magistrate Judge’s Recommendation

The magistrate judge assumed, without deciding, that the arbitration agreement would otherwise be enforceable and focused on whether the employee had plausibly alleged sexual harassment—the same plausibility standard used to decide a motion to dismiss.

The magistrate judge relied on guidance from the New York City Commission on Human Rights, which defines sexual harassment as “unwelcome verbal or physical behavior based on a person’s gender” and does not require that the conduct be sexual in nature. The court pointed to the Second Circuit’s long-standing recognition that a hostile work environment claim requires neither “sex-specific and derogatory terms” nor evidence that “sexual desire” motivated the harassment. If sexual harassment need not be sexual under Title VII of the Civil Rights Act of 1964’s more demanding framework, the court reasoned, it need not be sexual under the more liberally construed NYSHRL and NYCHRL.

The magistrate judge found the employee’s allegations plausibly alleged “unwelcome gender-based conduct” that subjected her to inferior “terms, conditions, or privileges of employment.” Therefore, the case involved a “sexual harassment dispute” under the EFAA, and the magistrate judge recommended that the motion to compel arbitration be denied.

The magistrate judge cautioned that not every allegation of gender-based mistreatment amounts to sexual harassment, even under the broader sexual harassment definition. For example, the alleged exclusion from the prayer carpools and the alleged interference with the plaintiff’s work were neither physical nor verbal and would not, standing alone, constitute sexual harassment.

Neither party filed objections to the report and recommendation. On October 20, 2026, U.S. District Judge Hector Gonzalez reviewed the recommendation for clear error, adopted it as “well-reasoned,” and denied the employer’s motion to compel arbitration.

Next Steps

This decision illustrates that sexual harassment is not limited to sexual advances, sexual comments, or lewd conduct. Instead, gender-based hostile work environment claims involving verbal or physical conduct—such as demeaning comments, insults, yelling, or gender stereotyping—may qualify as sexual harassment under the NYSHRL and NYCHRL. In practice, this may turn the traditional understanding on its head: rather than sexual harassment being a narrow subset of gender discrimination, many general gender discrimination claims may now be viewed as sexual harassment claims.

Despite the ruling in Elshabrowy, courts in New York remain divided on this issue. Employers with operations in New York may wish to review their arbitration agreements and dispute resolution strategies with the understanding that gender-based hostile work environment claims may not be arbitrable. Employers may wish to promptly investigate harassment complaints and train managers that demeaning, gender-based comments—even those with no sexual content—may be treated as sexual harassment under state and local law.

Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group and Diversity, Equity, and Inclusion Compliance Practice Group will continue to monitor developments and will post updates on the Arbitration and Alternative Dispute Resolution, Diversity, Equity, and Inclusion Compliance, Employment Law, and New York blogs as additional information becomes available.

Leslie A. Lajewski is a shareholder in Ogletree Deakins’ Morristown 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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