Quick Hits

• A federal district court in California has blocked USCIS, CBP, and the State Department from enforcing or implementing policies related to the proclamation-based $100,000 H-1B payment requirement.
• The California ruling represents another adverse federal district court decision involving the $100,000 payment, which is already blocked pursuant to a separate federal district court decision in Massachusetts that is currently on appeal.
• The court order does not affect the U.S. Department of Homeland Security’s (DHS) separately proposed $103,265 fee for H-1B cap-subject petitions, which remains in the rulemaking process and is not currently in effect.

Background

The case, Global Nurse Force v. Trump, was brought by a coalition of employers, labor organizations, schools, healthcare providers, religious organizations, and individuals challenging the $100,000 H-1B payment requirement and the agencies’ implementation of it.

President Donald Trump established the payment requirement through Proclamation 10973, issued on September 19, 2025. As implemented by USCIS, CBP, and the State Department, the requirement primarily affected H-1B workers outside the United States who needed consular processing or admission at a U.S. port of entry.

On September 18, 2026, President Trump issued Proclamation 11069, extending the restriction through September 21, 2027.

On September 30, 2026, the federal district court in California blocked the agencies from enforcing or implementing the proclamation-based payment requirement unless and until they comply with the rulemaking requirements of the Administrative Procedure Act.

Impact on Employers

For employers, the practical impact is straightforward: the proclamation-based $100,000 H-1B payment is not currently being enforced. Employers filing H-1B petitions, including cases requiring consular processing or admission from abroad, are therefore not currently required to pay the $100,000 amount.

The September 30, 2026, California order is the second federal district court decision blocking the payment requirement. A federal district court in Massachusetts has also blocked the requirement, although that decision is currently on appeal before the U.S. Court of Appeals for the First Circuit.

The litigation continues. The federal district court in California has scheduled a case management conference for October 27, 2026, with a joint case management statement due on October 20, 2026.

Employers should keep the $100,000 proclamation-based payment conceptually separate from DHS’s proposed $103,265 fee for certain H-1B cap-subject petitions. That proposed fee, part of a separate rulemaking process, is not affected by the September 30, 2026, order of court, though the $103,265 fee is not currently in effect. The comment period closed on September 24, 2026, and DHS has not yet issued a final rule.

Next Steps

Employers sponsoring H-1B workers may want to consider the following:

• The proclamation-based $100,000 payment is not currently required. This includes H-1B petitions involving workers who will require consular processing or admission to the United States from abroad.
• Employers should continue monitoring the litigation. USCIS currently advises on its website that, if the applicable court order is later lifted, DHS intends to collect the payment.
• The current litigation posture remains subject to change. Additional court rulings, appellate decisions, or agency actions could alter the requirements applicable to H-1B petitions and admission.
• The separately proposed $103,265 H-1B cap fee is not yet in effect. That proposal is proceeding through a separate rulemaking process and is not affected by the September 30, 2026, court order.

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

For additional insight into the critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. 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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‘Gone Till November.’ This week, the U.S. Senate wrapped up its current legislative period, and its members hit the campaign trail ahead of the November midterm elections. Senators (as well as members of the U.S. House of Representatives) are slated to return to Washington, D.C., on November 9, 2026, for the lame-duck session of the 119th Congress. The political dynamics in that session are sure to be interesting, as we will—theoretically—know where the balance of power will lie in both legislative chambers beginning in 2027. During the “lame duck” legislative waddle, the Buzz will be monitoring the status of the Faster Labor Contracts Act and federal government funding, which, absent congressional action, will expire on December 12, 2026. There are thirty-two days until Election Day.

District Court Blocks Implementation of $100,000 H-1B Visa Fee. On September 30, 2026, the U.S. District Court for the Northern District of California vacated guidance documents issued by U.S. Citizenship and Immigration Services (USCIS), the U.S. Department of State, and U.S. Customs and Border Protection (together, “the agencies”) that implemented President Donald Trump’s Proclamation 10973, which requires employers to include a $100,000 fee with each H-1B petition filed.

Rather than focusing on the president’s authority to establish the fee requirement, the district court focused on the legality of the implementing guidance documents, which “set their own criteria for administering the fee and determining whether to grant exceptions from it.” The court ruled that the agencies violated the Administrative Procedure Act when issuing the guidance documents because they “failed to consider any alternatives or the reliance interests of the regulated parties” (emphasis in the original) or make the policies available for public comment. Importantly, the decision enjoins the agencies from enforcing or implementing the guidance documents issued pursuant to the proclamation, including its extension until September 21, 2027.

This is the second court to block implementation of the proclamation, while a third court—the U.S. District Court for the District of Columbia—upheld the proclamation as a valid exercise of presidential authority. Both of the prior decisions are under appeal. Predicting where this matter will ultimately be decided, the California district court wrote, “[T]he United States Supreme Court is likely to eventually provide further clarity.” Amanda R. Goodman has additional details.

Sonderling Confirmed as Labor Secretary. On September 30, 2026, the U.S. Senate confirmed Keith Sonderling as secretary of labor by a vote of 47–41. Sonderling has served as acting secretary of labor since April 2026; he previously served as a commissioner on the U.S. Equal Employment Opportunity Commission, and, prior to that, was acting administrator of the U.S. Department of Labor’s (DOL) Wage and Hour Division. Sonderling will undoubtedly play a key role in driving the DOL’s regulatory agenda, particularly as the agency seeks to finalize key regulations in the remaining two years of the administration. Key regulatory developments include the finalization of rules addressing joint-employer and independent-contractor tests under the Fair Labor Standards Act, heat injury and illness prevention, and an increase in the prevailing wages that must be paid to certain employment-based immigrant visa holders and H-1B nonimmigrant visa holders.

Senate Approves College Sports Bill. On September 28, 2026, the U.S. Senate passed the Protect College Sports Act of 2026 (S. 4668) by a vote of 77–22. The bill establishes a federal governance framework to address multiple issues associated with college athletics, such as students’ name, image, and likeness rights, student recruitment and eligibility, regulation of sports agents, coaching transitions, and more. As the Buzz has discussed previously, the Protect College Sports Act is hands-off on students’ employee status, as it contains a provision stating that the bill is “neutral on, and does nothing to alter, employee or non-employee status for student athletes.” This contrasts with the House’s own college sports bill, the Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act, (H.R. 4312) which states, “[N]o individual may be considered an employee of an institution, a conference, or an interstate intercollegiate athletic association based on the participation of such individual on a varsity sports team or in an intercollegiate athletic competition as a student athlete.” Therefore, the House and Senate will have to address this issue if a comprehensive legislative solution addressing college athletics is to pass Congress.

Thurgood Marshall Sworn In. Today in 1967, Thoroughgood “Thurgood” Marshall was sworn in as the Supreme Court of the United States’ first Black justice. Marshall, who as chief counsel of the NAACP Legal Defense and Educational Fund successfully argued Brown v. Board of Education, 347 U.S. 483 (1954), would serve on the Court until his retirement in 1991. At the Buzz, we remember Marshall for authoring the 8–1 majority opinion in Emporium Capwell Co. v. Western Addition Community Organization, 420 U.S. 50 (1975), which upheld the discharge of Black employees who picketed their employer to protest alleged racial discrimination, rather than pursue the grievance procedure set forth in their collective bargaining agreement. Marshall viewed the picketing as unprotected concerted activity because it violated the principle of “exclusive representation” embedded in the National Labor Relations Act (NLRA). Marshall wrote, “The policy of industrial self-determination as expressed in [the NLRA] does not require fragmentation of the bargaining unit along racial or other lines in order to consist with the national labor policy against discrimination.” The concept of exclusive representation remains an important—and controversial—topic of labor policy debates.

Quick Hits

• The NLRB general counsel is pushing the Board to reverse Biden-era Board precedents in a recent NLRB case brief.
• The brief argued for the reversal of the 2023 Stericycle standard, which established a presumption that workplace rules were unlawful.
• The brief urged a return to a prior framework dating back to the first Trump administration that focuses on a “reasonable employee” and balancing elements.
• The common thread in the proposals in the brief is a move away from standards that presumed employer conduct was unlawful toward standards that “genuinely” balance employee and employer interests.

The general counsel (GC) brief—filed on September 11, 2026, in Atlassian Corp., Case 16-CA-324971—asks the Board to overrule Biden-era precedents that have made employer compliance with the law in these areas increasingly difficult (and often frustrating). The new brief comes in a case concerning the enforcement of an employer’s social media rules for workers and is notable for laying out detailed proposed replacement standards that offer a window into the possible future of labor law.

A New Standard for Workplace Rules

What the law currently requires. Under the 2023 Stericycle standard, the GC need only show that a workplace rule has a “reasonable tendency to chill employees from exercising their” rights under Section 7 of the National Labor Relations Act (NLRA). This preliminary showing is quite easy to establish. At that point, the rule is considered presumptively unlawful, and the employer must prove both that the rule advances a legitimate and substantial business interest and that no more narrowly tailored rule could serve the same interest. The employer’s intent is irrelevant.

Why the GC says it should go. The GC argues that the existing standard “presumed unlawful interference whenever employer policies potentially interacted with even the most excessively broad interpretations of Section 7.”  The GC further pointed to former NLRB member Marvin Kaplan’s observation in his dissent in Stericycle that the standard’s “reasonable employee” is essentially “predisposed to read into their employer’s work-rules references to Section 7 activity where none exists.” The result, the GC contends, is a “dilemma” that forces employers to “either comply with various legal and regulatory requirements or risk having every workplace policy challenged as potentially violative of the” NLRA. The employer’s rebuttal opportunity is “largely illusory,” the GC argued, because, again quoting former member Kaplan from a different case, “no matter how narrowly tailored the rule, there could always be a rule that is ever so slightly more narrowly tailored.”

What the GC proposes instead. The GC urges a return to a prior framework (dating to the first Trump administration), which uses reasonable-employee and balancing elements. But she would not use that prior framework’s three-category system, where certain rules were considered always lawful, while others received individual scrutiny, and others still were always unlawful. The GC says this category system was well-intentioned but resulted in “confusion among the labor-management bar.” The proposed replacement is a two-step test:

• Step 1: The GC must prove that a facially neutral rule would, in context, be interpreted by an “objectively reasonable employee” to potentially interfere with Section 7 rights. That employee is “aware of his legal rights but also interprets work rules as they apply to the everydayness of his job,” and critically, does not “view every employer policy through the prism of the NLRA.”

• Step 2: If the GC meets that burden, the Board then genuinely balances the employer’s legitimate business justifications—including societal interests and regulatory requirements—against the extent to which the rule interferes with Section 7 rights. Unlikethe extant test, this balance “necessarily entail[s] the possibility that in a particular case, a challenged rule may be lawful to maintain even though it limits the exercise of Section 7 rights to some extent because the legitimate employer interests it advances outweigh that limitation.”

Key shifts. Under this proposed framework, rules must be read in context—not in isolation—considering the rule’s evident purpose, surrounding sections, examples given, industry or work setting, and savings clauses. A rule would not be found unlawful merely because it “could hypothetically be interpreted” to limit Section 7 activity or because the employer “failed to eliminate all ambiguities from the rule.” The employer’s rebuttal would be a genuine balancing test, not a near-impossible burden of proving no narrower rule exists.

Applied to the facts. The GC’s briefing applied this proposed standard to four workplace rules that were litigated in the Atlassian Corp. case, and found three to be lawful: (1) a rule directing employees to “frame opinions, not demands,” (2) a prohibition on “ad hominem attacks,” and (3) a rule against communications with a negative impact on partners, shareholders, or customers. The GC found only the confidentiality rule to be unlawful because an “objectively reasonable employee” would understand the definition of confidential information to include “nonpublic information relating to employees and compensation,” i.e., “wage discussions.”

Practical takeaway: Commonsense civility rules and anti-harassment policies should survive under the proposed standard (even if they could arguably cover talk about unions or concerted activity, and even if more narrowly tailored language could achieve a similar result). But confidentiality rules that sweep in employee compensation remain a problem even under a more employer-friendly framework. Beyond confidentiality, we are likely to see the GC continue to take issue with rules that could fairly be interpreted to prevent concerted activity. Context, purpose, illustrative examples, and savings clauses are the building blocks of a defensible rule.

Workplace Misconduct Standard Overturned

Notably, the GC’s brief in Atlassian Corp. portended the reversal of the Board’s 2023 standard from Lion Elastomers II for when an employee is unlawfully disciplined for misconduct that occurs during the exercise of Section 7 protected concerted activity. The brief urged the Board to move away from applying different “setting-specific” tests depending on where the misconduct took place, and to readopt a single burden-shifting framework, regardless of setting.

On September 23, 2026, the Board issued a supplemental decision in the Lion Elastomers case that vacated the decision in Lion Elastomers II, thereby restoring the prior General Motors standard and the familiar Wright Line framework used in mixed-motive discipline cases. However, that ruling expressly leaves open the possibility that the issue could be revisited in a future case, meaning there could be more to come on this issue.

What This Means for Employers

Overall, the GC’s proposed changes share a common thread: the GC is urging the Board to move from standards that presumed employer conduct was unlawful to standards that genuinely balance employee and employer interests. If the Board follows the GC’s lead, employers would benefit from a more contextual, commonsense approach and greater certainty.

But change has not arrived yet. The five-seat Board would have to issue a case adopting these standards before they become law. Notably, the Board is positioned to do just that now that it has obtained a 3-1 Republic majority.

Rapid action by the NLRB is not expected, but employers may want to position themselves for the expected shift to more employer-friendly standards. That means reviewing social media policies and other key workplace rules now—with an eye toward crafting rules that would survive under either the current standard or the more balanced framework the GC is advocating.

Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor developments and will provide updates on the Traditional Labor Relations blog.

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Quick Hits

• On September 29, 2026, the SBA removed disparate impact liability and race-conscious affirmative action requirements from 13 CFR Part 112, effective immediately, without prior notice and comment.
• The revised rule states Title VI of the Civil Rights Act of 1964 prohibits only intentional discrimination and rests on the same legal authorities as the earlier agency rescissions, Alexander v. Sandoval, Loper Bright, Students for Fair Admissions, and Executive Order 14281.
• The SBA rule preserved the government’s and litigants’ ability to use disparate outcome data to prove intentional discrimination, reinforcing that data collection and preservation obligations remain squarely in place for employers even as the federal enforcement posture changes.

The SBA’s rule change follows the same template that the U.S. Departments of Justice, Interior, Transportation, Agriculture, and Labor used over the preceding ten months, but it also removes affirmative action provisions that the other rescissions did not need to reach.

The SBA Rule

The SBA amended 13 CFR Part 112, its Title VI implementing regulation for federally assisted programs, in three respects. It removed the affirmative action provisions at Sections 112.3(b)(3) and 112.7(d), which authorized, and in some cases required, measures conscious of race, color, and national origin to overcome the consequences of practices that had limited participation, even where the recipient had never used discriminatory policies. It deleted the disparate impact language in Section 112.4 that extended the employment-discrimination prohibition to practices that merely “tend” to have a discriminatory effect, and removed the companion illustration at Section 112.7(a).

Same Pattern, One Additional Layer

The SBA rule follows the pattern in other federal agencies’ actions to rescind disparate impact regulations under Title VI. Indeed, the rule notes that DOJ reviewed and approved it. The SBA relies on the same reasoning as the other agencies: Title VI’s “single, best meaning” is that it prohibits intentional discrimination only. The SBA describes its disparate impact regulations as in “considerable tension” with Title VI and the Supreme Court of the United States’ precedents (including Students for Fair Admissions, Inc. v. President & Fellows of Harvard College). The SBA also invokes Executive Order 14281, which directs the elimination of disparate impact liability “to the maximum degree possible.” SBA issued its regulation without notice and comment and with an immediate effective date, invoking the Administrative Procedure Act’s exception at 5 U.S.C. § 553(a)(2) for rules relating to public property, loans, grants, benefits, or contracts.

The SBA rule goes further than the other rescissions by also addressing affirmative action. Prior sections of its rules authorized and sometimes required funding recipients to use race-conscious measures, such as racial preferences, special consideration of race, and affirmative steps to achieve racial balance, without requiring the narrow tailoring to a compelling governmental interest that strict scrutiny demands. The SBA characterized these provisions as encouraging “the exact conduct the Equal Protection Clause forbids.” The rescission of those provisions is a separate action from the disparate impact removal, and SBA took the position that each amendment operates independently, meaning that invalidation of one would not affect the others.

Disparate Impact Is Out, but the Same Data Can Still Support Liability

Consistent with every prior Title VI disparate impact rescission (by the U.S. Departments of Justice, Interior, Transportation, Agriculture, and Labor (DOL)), SBA stated that eliminating disparate impact liability “does not preclude the use of data on disparate outcomes to help prove intentional discrimination.” It drew the same distinction the DOL rule drew most clearly: using statistical disparity to help establish liability for intentional discrimination as an evidentiary matter “materially differs from using such disparity to impose liability for an unintentional disparate impact.”

That language is now in six federal agency rescission rules. The federal government has not told funding recipients or employers that their data is safe to disregard. It has told them that the same statistics once used to establish disparate impact liability are now positioned as evidence of intentional discrimination, the theory that remains fully enforceable.

SBA’s own cost-benefit analysis acknowledged that the removed provisions were already “effectively inoperative,” which only sharpens the point. The practical change for funding recipients may be modest, but the evidentiary reframing of disparate outcome data, from a standalone basis for liability to a tool for proving intent, is not.

What This Means for Employers and Funding Recipients

The SBA rule narrows part 112 regulations under Title VI. It does not affect Title VII, which independently codifies disparate impact liability, or the state and local statutes that continue to apply it. Employers with SBA relationships may wish to consider:

• Identifying the SBA relationship at issue, i.e., determining whether the organization is applying for or receiving SBA financial assistance covered by part 112, participating in an SBA contracting program, or both.
• Continuing to evaluate intentional and disparate impact discrimination risk by, for example, conducting and structuring adverse impact analyses under attorney-client privilege before a problem surfaces, not after.
• Accounting for continued private and state-level exposure. Private plaintiffs retain a right of action under Title VII of the Civil Rights Act of 1964, and state and local agencies continue to apply disparate impact analysis under their own statutes.
• Recognizing what the data now proves. The demographic and selection data that employers collect and maintain does not become safe because disparate impact liability is rescinded. That same data is now positioned as potential proof of intentional discrimination, the theory the U.S. Equal Employment Opportunity Commission (EEOC) says it is prioritizing.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group, Government Contracting and Compliance Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Employment Law, Government Contracting and Compliance, and Workforce Analytics and Compliance 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.

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Quick Hits

• AI tools can be extremely helpful in supporting the need for constant safety oversight in manufacturing environments
• However, employers retain the responsibility to comply with OSHA regulations, even if the employer implemented an AI process designed to protect worker safety.

AI has many positive use scenarios in a manufacturing setting. A camera notices that a worker walked into a press area without safety glasses. A sensor on a conveyor motor picks up a vibration pattern that has previously indicated an impending failure. A forklift slows down as a pedestrian comes around a blind corner. In this AI age, manufacturing employers implement AI resources not only to increase efficiency, but to better promote workplace safety—striving for fewer injuries, fewer disruptions, and a stronger safety culture. But one principle applies to AI in any setting: AI works best as a tool that supports human judgment, not one that replaces it. Without real human oversight, AI safety systems can leave gaps that could lead to worker injuries and OSH Act compliance shortfalls.

How AI Is Supporting Worker Safety

Used well, AI can extend what a safety team is able to see, predict, and respond to. Applications of AI are growing each day, but common uses in manufacturing can include:

• Personal protective equipment (PPE) compliance: Cameras paired with AI models can flag missing hard hats, eye and face protection, or proper gloves.
• Safety alarms: Systems can watch the restricted areas around hazardous machinery or blind spots and send warnings when employees enter an area where collision could occur.
• Predictive maintenance: AI can analyze sensor data and spot signs of equipment wear or failure before a breakdown, reducing the need for emergency maintenance.
• Incident analytics: AI can sort through large volumes of incident and near-miss reports to find trends that would be hard to see manually.
• Collaborative robots: “Co-bots” can take over repetitive or hazardous tasks and reduce workers’ exposure to strain and repeat use injuries.

Each of these tools can make a safety program stronger, but relying too heavily on any of them can create inadvertent gaps in even the most well-intentioned safety program. These gaps create openings for unintended compliance shortfalls and—potentially—employee injuries. Employers may want to continue intentionally monitoring their safety programs—even those supported by AI tools—to identify these gaps and create solutions to fill them.

Why Human Oversight Still Matters

However, AI does not replace competent or qualified persons, hazard assessments, or enforcement of safety rule violations. If employees assume “the system will catch it,” basic safety practices can slip. And it is the employer that remains responsible: the duty to comply with the OSH Act’s general duty clause (Section 5(a)(1)) and applicable Occupational Safety and Health Administration (OSHA) regulations cannot be handed off to a vendor or an algorithm.

Mapping AI to Commonly Cited OSHA General Industry Standards

OSHA has not issued regulations specific to AI use in safety programs. However, the following OSHA general industry standards come up often in manufacturing and are among OSHA’s Top Ten Most Frequently Cited Standards for the most recently reported year. AI can assist with each, but people must still oversee these processes to ensure compliance with OSHA requirements.

The pattern is the same across the board: AI can improve detection and efficiency, but human involvement is necessary to verify the accuracy of written programs, conduct training, carry out inspections, and implement enforcement programs. After all, it is still the employer that will be liable for an OSH Act violation, even if the employer implemented an AI process designed to protect against those violations.

Top Five Tips for Effective Use of AI in Manufacturing Safety Systems

Employers thinking about adopting AI safety tools, or already using them, may want to consider the following tips:

• Robust safety teams. Assessing the current human safety team before implementing AI tools for any safety tasks is a critical early step. Employers may want to identify whether the team is comprised of the right people, with the right experience and knowledge of the workplace, to identify potential hazards and whether AI tools can assist in reducing those risks.
• Intentionality. Consider starting with a traditional hazard identification and assessment. This step includes intentionally identifying the hazards that may exist before implementing an AI process, as well as the hazards that could be caused by the AI tool itself, and implementing only AI processes that are necessary or are tied to a specific safety-related goal.
• Integration, not replacement. Because human oversight is crucial in all safety programs, it is important to note that AI safety tools are not a substitute for an employer’s existing safety and health programs. Human involvement could take many forms, including:
  • Defining alert ownership. Factors include deciding who reviews alerts, how quickly they must respond, and what they are expected to do.
  • Validating and auditing performance. Standard elements in this step include testing systems under real site conditions, and auditing them again after changes to equipment, layout, or processes.
  • Keeping a human in the loop for stop-work decisions. Employers may want to remind their employees that people, not AI, should make the final call on whether to stop or restart work.
  • Training workers and supervisors. Employers may want to ensure that workers and supervisors understand what the tools do, where they fall short, and why ordinary safety practices still apply.
  • Documenting oversight activities. Keeping records of validation, audits, alert responses, and corrective actions demonstrates that employees exercise oversight of the safety programs.
  • Encouraging reporting without retaliation. Employers may want to invite workers to report AI failures or concerns and make sure no one faces retaliation for doing so.

Conclusion

AI has real potential to make manufacturing workplaces safer. It can catch hazards people might miss, predict failures before they happen, and take workers away from dangerous tasks. But the technology is a safety ally, not a safety manager. Employers that pair AI with strong human oversight, clear accountability, and a solid OSHA compliance program will be in the best position to reduce injuries and manage legal risk.

Ogletree Deakins’ Artificial Intelligence and Innovation Practice Group and Workplace Safety and Health Practice Group will continue to monitor developments and provide updates on the Artificial Intelligence and Innovation, Manufacturing, and Workplace Safety and Health blogs as additional information becomes available.

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Quick Hits

• A New Jersey federal district court rejected a concrete company’s bid to overturn an arbitrator’s award in favor of an employee who was discharged after testing positive for marijuana.
• The court found that the odor of marijuana alone is not sufficient to establish reasonable suspicion of cannabis use, possession, or impairment as required for an adverse action under CREAMMA.
• Under CREAMMA, an employer may take an adverse employment action against an employee based on—but not solely due to—the presence of cannabinoid metabolites in the employee’s bodily fluids.

Under CREAMMA, marijuana is legal for recreational use. The law prohibits employers from taking adverse employment actions solely based on a positive marijuana test. Employers can require an employee to undergo a drug test when there is reasonable suspicion of an employee’s use of marijuana while on duty, when there are observable signs of marijuana intoxication, or following a work-related accident subject to investigation by the employer.

Background on the Case

In April 2025, as an employee for County Concrete Corp. drove his personal vehicle during a lunch break past a supervisor and coworker on company property, the supervisor and coworker claimed that they detected a strong smell of marijuana from the vehicle. The supervisor ordered the employee to take a drug test, which returned positive for marijuana. The company fired the employee, who had previously tested positive for marijuana in December 2023. The employer had a two-strike policy, stating that two positive drug tests could result in termination of employment. The employee was represented by the International Brotherhood of Teamsters Local 863, which filed a grievance that proceeded to arbitration.

In December 2025, the arbitrator awarded the employee reinstatement to his former position with full back pay, seniority, and benefits. She found that the company failed to establish the employee’s use of, possession of, or impairment from cannabis at the workplace.

County Concrete filed a petition to vacate the arbitrator’s award. It argued that the arbitrator disregarded controlling New Jersey law and exceeded her contractual authority derived from the collective bargaining agreement.

The company argued that the arbitrator ignored CREAMMA when she, in issuing her decision, considered the nonbinding best practices for employers published by the New Jersey Cannabis Regulatory Commission, including relying on observable, physical signs of impairment while on duty and documenting evidence within twenty-four hours or before drug test results arrive, and designating a point person with sufficient training to determine impairment. The union and the employee argued that an odor on clothing or in a car only established that marijuana may have been present at some prior time, not that an employee consumed the drug on an employer’s property or was impaired while on duty.

Federal District Court Ruling

The U.S. District Court for the District of New Jersey noted that, in cases like this one concerning a collective bargaining agreement, courts must give deference to the arbitrator’s decision even if the arbitrator made errors in law or fact. An arbitrator’s award can only be vacated if it was procured by corruption, fraud, or undue means; if there was evident partiality or corruption in the arbitrator; if the arbitrator was guilty of misconduct in refusing to postpone a hearing or hear evidence; or if the arbitrator exceeded his or her powers.

In reviewing the arbitrator’s decision, the district court concluded that the arbitrator did not manifestly disregard CREAMMA or exceed her contractual authority. In confirming the award, the court explained that odor, standing alone, does not establish reasonable suspicion that an employee was using cannabis while performing his or her job duties or that the employee was impaired on employer property. Rather, “[a]n odor, standing alone, establishes only that cannabis may have been present at some point.” The court noted that, in this case, “[t]here was no testimony that Grievant slurred his speech, no evidence that his eyes were glassy, and no evidence that he was impaired while on duty, and no report or evidence of poor work performance.” Further, the employer “allowed the Grievant to complete his shift until 4:30 pm that day without any reports of being impaired.”

The court made further reference to the fact that, contrary to best practices identified by the New Jersey Cannabis Regulatory Commission, the employer did not document the observance until more than a week later, and neither the supervisor nor coworker who observed the marijuana smell were trained in drug impairment recognition. The court found the arbitrator’s award was aligned with established legal precedent and was “rationally derived” from the collective bargaining agreement.

Next Steps

This case shows that, in New Jersey, the odor of marijuana and a positive drug test, without additional evidence, is not sufficient to justify an adverse employment action against an employee suspected of cannabis use, possession, or impairment. It also highlights the importance of drug impairment recognition training for individuals assessing an employee’s potential marijuana use.

Employers in New Jersey may wish to review their employee handbooks and collective bargaining agreements to ensure compliance with state laws regarding drug testing and off-duty marijuana use. Courts in New Jersey are likely to show deference to an arbitrator’s interpretation of a collective bargaining agreement except in rare circumstances.

Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group and the Drug Testing Practice Group will continue to monitor developments and will post updates on the Arbitration and Alternative Dispute Resolution, Drug Testing, and New Jersey blogs as additional information becomes available.

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

Steven J. Luckner 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

• California is leading the charge to regulate AI use in the workplace with a suite of new laws targeting workplace monitoring and automated decision-making.
• California’s AB 1883 bans AI-powered workplace surveillance tools that predict employees’ emotional states or collect neural data, and AB 1331 prohibits employers from using workplace surveillance tools to monitor employees in bathrooms.
• SB 947, the “No Robo Bosses Act,” prohibits employers from relying solely on automated decision systems for discipline or termination decisions, effective July 1, 2027.

The bills include Assembly Bill (AB) 1883, which bans AI-driven workplace monitoring tools that make predictions about employees’ emotional states or collect employees’ “neural” data; AB 1331, which prohibits workplace surveillance in bathrooms; Senate Bill (SB) 947, the “No Robo Bosses Act,” which prohibits employers from relying solely on automated decision systems for discipline or termination. Together, these laws increase employers’ potential liability for using AI-powered tools in the workplace.

AB 1883—Workplace Surveillance Tools

AB 1883, titled “Workplace surveillance tools,” was enacted as employers are being offered an increasing array of tools that monitor everything from text and audio to biometric factors and behaviors. The law follows the European Union’s lead as the European AI Act already bans AI systems used for emotion recognition in the workplace and in educational settings.

AB 1883 bans the use of “workplace surveillance tool[s]” that use AI to either: (1) recognize, or make inferences or predictions about, an individual’s emotional state; or (2) collect neural data. “Workplace surveillance tools” are defined in the law as “any system, application, instrument, or device that collects” information about employees’ activities, communications, biometrics, or behaviors in a way other than direct observation by a human. Such tools include video or audio surveillance, time-tracking, geolocation tools, or others that use “a photo-optical system.” Additionally, the law bans the collection of employees’ “neural data,” meaning information that measures employees’ central or peripheral nervous systems.

Violations can result in statutory or civil penalties of up to $500 per violation. Further, although the law does not provide a private right of action, employers may face liability under the California Private Attorney General Act (PAGA), which allows individuals to pursue Labor Code-based penalty claims on behalf of the state.

AB 1331—Workplace Surveillance of Employees

AB 1331 also targets workplace monitoring or surveillance tools that collect “employee data, activities, communications, actions, biometrics, or behaviors by means other than direct observation by a person.” The law prohibits employers from using a workplace surveillance tool to monitor or surveil employees in workplace bathrooms, with limited exceptions, and allows employees to leave surveillance devices behind when entering those areas. AB 1331 permits employers to require employees to use a “workplace surveillance tool, including a badge or personal alarm system” to “access a locked or secured bathroom” so long as it does not have an audio or video recording capability and “does not have physically embedded or attached artificial intelligence.” AB 1331 shares an enforcement structure with AB 1883, including civil penalties of up to $500 per violation.

SB 947—‘No Robo Bosses Act’

SB 947, known as the “No Robo Bosses Act,” will take effect on July 1, 2027. The law is a newer version of a similar law that Governor Newsom vetoed in 2025. The law prohibits employers from relying solely on an automated decision system (ADS) for discipline or termination decisions, requiring a human reviewer to independently corroborate the ADS output. SB 947 also bars using an ADS to infer a worker’s protected characteristics or to predict and retaliate against a worker for exercising legal rights. Additionally, the law requires employers to provide post-use notice to affected employees when an ADS is used in employment decisions.

Increasing Scrutiny of Monitoring Tools

Employers have increasingly embraced workplace monitoring tools to increase productivity, efficiency, and workplace health and safety. An array of monitoring tools is now available that exceed traditional text, audio, internet, and keystroke activity recording. These newer technologies collect and analyze employees’ location data; biometric factors such as heart rate, sweating, and brainwaves (often via wearable devices); linguistic data; and visual recordings that capture micro-expressions, body language, and eye movements. Data can then be analyzed using AI to make predictions about employees, potentially their mental states. This can allow employers to intervene when an employee is in danger or provide support when necessary.

AB 1883 targets many of these AI-driven tools, but the final version of the law is more narrowly tailored than prior versions. It allows non-AI-powered workplace monitoring tools that are not used for the prohibited purposes and explicitly permits employers to use a “workplace surveillance tool” to “ensure safety.” This addresses concerns from some opponents that the bill would potentially have banned basic security surveillance tools and safety measures, such as sensors that can detect distracted or fatigued drivers.

Still, it will be necessary for employers to conduct due diligence on any monitoring tools being implemented or considered to determine what predictions or outputs the tools produce and whether the data collected could be considered “neural data.”

Evolving AI Legal Landscape

The latest package of bills once again puts California at the forefront of AI regulation in the United States. Whereas, under the current administration, there has been a dearth of federal workplace AI legislation, regulations, or other rulemaking, and no action to address AI-powered monitoring tools is expected in the foreseeable future.

The signings come on the heels of Governor Newsom signing two AI executive orders. N-10-26, also signed on September 30, 2026, declares that all state agencies and departments refer to AI technologies as “artificial intelligence” or “AI” regardless of “any rebranded or different terminology used by the federal government.” Signed on September 18, 2026, N-9-26 directs the state to explore increased oversight of AI development, including potentially requiring a “kill switch” for frontier AI models.

In addition, California, Colorado, Connecticut, Illinois, New York City, and Texas all have laws that restrict the use of automated decision tools for significant or consequential employment decisions, such as hiring, promotion, and termination. Those laws could arguably apply to AI-powered employee monitoring tools, particularly if the output of such tools is used to influence key employment decisions. It is expected that states will continue to legislate in this area.

Next Steps

California continues to be on the frontier of AI legislation. Employers should pay close attention to these new California AI laws and the evolving regulatory landscape governing the use of monitoring and AI-powered tools in the workplace. Before implementing a specific tool, employers may want to thoroughly vet what data the tool collects, how that data will be used, and whether the tool uses AI to generate any output from that data, as these new laws place additional compliance requirements on employers.

Employers using automated decision systems for discipline or termination decisions may want to prepare for SB 947’s requirements, including the human reviewer mandate effective July 1, 2027. More broadly, employers may further wish to consider the impact on employee morale and workplace culture when considering the use of a monitoring tool.

Ogletree Deakins’ Artificial Intelligence and Innovation Practice Group will continue to monitor developments and will provide updates on the Artificial Intelligence and Innovation, California, Cybersecurity and Privacy, and Employment Law 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

• Senate Bill 690 limits website-related California Penal Code Section 638.51 claims to actions brought by the attorney general, effective January 1, 2027, with a two-year retroactive reach.
• The law curbs private trap-and-trace lawsuits involving cookies, pixels, and similar tracking technologies, though constitutional challenges and other claims may remain.
• Companies may want to continue reviewing tracking tools, third-party data sharing, consent practices, privacy policies, and cookie-banner disclosures.

The amendment to Section 637.2 provides that: “An action against a private actor for a violation of Section 638.51 alleged to arise from conduct occurring on an internet website, online application, or mobile application may be brought under this section only by the Attorney General.”

For context, Section 638.51 provides that a person may not install or use a pen register or a trap and trace device without first obtaining a court order. A “pen register” is a “device or process that records or decodes dialing, routing, addressing, or signaling information transmitted by an instrument or facility from which a wire or electronic communication is transmitted, but not the contents of a communication.” Penal Code ¶ 638.50(c) defines a “trap and trace device” as a “device or process that captures the incoming electronic or other impulses that identify the originating number or other dialing, routing, addressing, or signaling information reasonably likely to identify the source of a wire or electronic communication, but not the contents of a communication.” California courts have concluded that software (such as cookies) may qualify as a pen register or trap and trace device, and that third-party pixels and other tracking technologies used on websites may also fall within the statutory definition. As a result, plaintiffs have used Section 638.51 to bring a wave of lawsuits, often brought as putative class actions.

The relief provided by the California Legislature was to amend 637.2 of the California Penal Code, which eliminates a private right of action under California Penal Code Section 638.51 and mandates that only the attorney general can bring trap and trace claims. The law takes effect on January 1, 2027, and applies retroactively for two years, which means it applies to lawsuits that have been filed over the last two years. It seems like a perfect result.

Not so fast, this is California after all. The retroactive application will likely be challenged on constitutional grounds. In addition, the plaintiffs’ bar believes that this law does not provide a blanket immunity and that conduct that constitutes intentional, surreptitious, and independently tortious interception and exploitation of consumer communications will still be subject to Section 638.51. Finally, this law does not affect claims under Penal Code Section 631(a), which addresses wiretapping, and Penal Code Section 632, which addresses recording confidential communications. These are other common causes of actions in lawsuits challenging the operation of a website.

The most important takeaway is that, even with this change in California law, careful review and maintenance of company websites remains a priority. Key points include using cookie banners on company websites and crafting consent and privacy policies; reviewing website analytics or tracking tools; and determining whether data is collected and shared with third parties, and whether opt-in consent for tracking tools may be appropriate in certain high-risk states.

Ogletree Deakins’ California offices and Cybersecurity and Privacy Practice Group will continue to monitor developments and will post updates on the California and Cybersecurity and Privacy blogs as additional information becomes available.

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Quick Hits

• In 2025, Oregon enacted SB 537, which expanded the types of healthcare employers are required to establish a workplace violence prevention plan, conduct safety and security assessments, and train employees on responding to threats of violence.
• In June 2026, Oregon OSHA published a proposed rule implementing the law, which is expected to take effect in January 2027.
• Oregon OSHA’s proposed rule would broaden the definition of “workplace violence” and explicitly require home health agencies and home hospice programs to have workplace violence prevention programs, in addition to hospitals and ambulatory surgical centers, which were already required to have such programs.

Oregon OSHA’s proposed rule implementing SB 537 defines “workplace violence” as “any act or threat of physical violence, assault, homicide, harassment, or intimidation or any other threatening behavior that occurs in the workplace.” This broad definition means compliant prevention plans would have to address a wider range of conduct than physical attacks alone.

The proposed rule would add a new provision that specifies that it is illegal to discriminate against healthcare workers for reporting workplace violence that occurs on the premises of a healthcare employer or in the home of a patient receiving home healthcare services.

The proposed rule would require healthcare employers to conduct periodic security and safety assessments to identify threats of workplace violence and develop and implement a workplace violence prevention plan based on the security and safety assessments. Healthcare employers would be required to give each employee a written copy of the workplace violence prevention plan, including a statement explaining that employees who report workplace violence have a right to be protected from retaliation. 

The proposed rule also would require healthcare employers to provide annual workplace violence prevention training to employees and any contracted security staff who work on an employer’s premises.

Recordkeeping Requirement

Under the proposed rule, healthcare employers would be required to maintain a record of all workplace violence incidents that occur on the healthcare employer’s premises or in the home of a patient receiving home healthcare services. The record would be required to include:

• the name and address of the premises on which the incident occurred;
• the date, time, and location where the incident occurred;
• the name, job, and department or ward assignments of the employee who was affected;
• a description about the person who committed the assault as a patient, visitor, employee, or other category;
• a description of injuries like minor soreness, surface abrasions, scratches, bruises, severe lacerations, bone fracture, head injury, loss of limb, or death;
• a description of any weapon used;
• the number of employees, including nursing staff, in the immediate area of the assault when it occurred; and
• the actions employees and the healthcare employer took in response to the incident.

Next Steps

Oregon OSHA’s proposed rule reflects a growing trend toward comprehensive, prevention-focused workplace violence protections in healthcare settings. The department said that the proposed rule will “tentatively” be adopted in October 2026 and take effect in January 2027. While waiting for OSHA Oregon to finalize the regulatory guidance, employers may wish to audit their current program and conduct a gap analysis, prioritize compliance efforts, and develop an implementation timeline ahead of compliance deadlines.

Ogletree Deakins’ Workplace Violence Prevention Practice Group will continue to monitor developments and will post updates on the Healthcare, Oregon, and Workplace Violence Prevention blogs as additional information becomes available.

Emma J. Redden is a shareholder in Ogletree Deakins’ Portland, OR, office.

Jacqueline M. Duvall is of counsel in Ogletree Deakins’ Kansas City office.

Kenneth M. Rock is of counsel in Ogletree Deakins’ Portland, OR, 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

• Beginning January 1, 2028, employers already subject to California’s mandatory harassment prevention training requirements must incorporate an anti-hate speech component into that training.
• AB 1803 does not create a separate training obligation and does not increase the existing one-hour and two-hour training minimums. Employers may fold the new content into their current programs.
• The bill does not define “hate speech,” a gap the Assembly Committee on Labor and Employment flagged during the legislative process, and one that employers should watch as agency guidance develops.

Background on California’s Harassment Prevention Training Mandate

California employers with five or more employees are already required to provide at least two hours of harassment prevention training to supervisory employees and at least one hour to nonsupervisory employees every two years. New nonsupervisory employees generally must be trained within six months of hire, and new supervisory employees within six months of assuming a supervisory role. The required training currently must address sexual harassment, prevention of abusive conduct, and harassment based on gender identity, gender expression, and sexual orientation. AB 1803 amends this existing framework rather than replacing it.

What AB 1803 Adds

Beginning January 1, 2028, covered employers must include anti-hate speech training as a component of their existing harassment prevention training. That component is expected to give supervisors and employees practical guidance on recognizing, reporting, and confronting workplace speech that vilifies, humiliates, or incites hatred against people based on the Fair Employment and Housing Act’s (FEHA) protected characteristics, including race, religious creed, color, national origin, ancestry, physical or mental disability, reproductive health decision making, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and veteran or military status.

Notably, the bill does not increase the existing training time requirements or require a standalone course. Employers may incorporate the new content into their existing harassment prevention programs, and training will satisfy the new requirement if it already includes information about both the prohibition against unlawful harassment and the prevention of abusive conduct based on protected characteristics. As a result, some employers’ current training may already cover part or all of the new requirement.

The Undefined ‘Hate Speech’ Problem

AB 1803 does not define “hate speech.” The law does not distinguish between harassment based on a protected characteristic, which is unlawful under FEHA, and “hate speech,” which is not otherwise addressed in FEHA, and which may or may not be different behavior.

The Assembly Committee on Labor and Employment’s analysis of the bill noted that committee staff was unaware of any existing definition of hate speech under California law and observed that hate speech itself is not illegal but can violate employment law when it rises to an actionable level of workplace harassment or discrimination. Lawmakers flagged this gap as the bill moved through committee, but it was not resolved before the bill reached the governor’s desk.

For employers, this creates some ambiguity heading into 2028. The lack of a fixed statutory definition allows flexibility in how training content is framed, but it also leaves open questions about how “recognizing and confronting” hate speech will be interpreted in practice, both by trainers and, eventually, by courts and the Civil Rights Department.

Key Takeaways

AB 1803 does not overhaul California’s harassment prevention training scheme, but it does add a substantive new component that covered employers will need to build into their existing programs beginning January 1, 2028. Employers should begin reviewing current training content, coordinating with training vendors, and confirming that reporting and investigation practices can handle complaints involving hate speech, ahead of the effective date.

Ogletree Deakins’ California offices will continue to monitor developments with respect to AB 1803 and related legislation affecting California’s workplaces and will provide updates on the firm’s California and Workplace Violence Prevention blogs as additional information becomes available.

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