Quick Hits

• The California Court of Appeal, Second Appellate District, held that ambiguities in three arbitration documents did not defeat the parties’ mutual intent to arbitrate. The ambiguities involved Federal Arbitration Act (FAA) applicability, arbitrator selection, and Private Attorneys General Act (PAGA) waivers.
• The court found only a low level of procedural unconscionability, typical of adhesive employment agreements, and no substantive unconscionability.
• The agreement’s severability clause allowed the court to sever one invalid wholesale PAGA waiver. That waiver did not render the entire agreement unenforceable.
• The court held that the confidentiality agreement’s injunctive relief provision was not substantively unconscionable. It did not require the employee to consent to an immediate injunction.

In Santana v. Studebaker Health Care Center, LLC, the California Court of Appeal, Second Appellate District, reversed a trial court’s denial of an employer’s motion to compel arbitration. The trial court had found that the multiple documents showed a lack of mutual assent. It also found the arbitration agreement procedurally and substantively unconscionable. The appellate court’s decision offers important guidance for employers using multiple arbitration documents during onboarding.

Background

The case involved an employee who began working at a skilled nursing facility in 2020. The defendant-employer purchased the facility in January 2023. During onboarding, the employer required the employee to sign three arbitration-related documents. These documents covered different types of employment claims. The court called them, collectively, the “agreement to arbitrate.” The employee also signed a confidentiality agreement prohibiting disclosure of confidential information and trade secrets.

In May 2024, the employee filed a wage-and-hour class action against the employer. She alleged California Labor Code violations, a PAGA cause of action, and unfair business practices under Business and Professions Code section 17200.

The employer moved to compel arbitration of the employee’s individual claims, including her individual PAGA claim. It also sought to enforce the class action waiver. The trial court denied the motion on two grounds. First, inconsistencies among the documents showed a lack of mutual assent. Second, even if a valid agreement existed, it was unconscionable. The court found procedural unconscionability from unequal bargaining power and conflicting terms. It found substantive unconscionability from the PAGA waiver and the confidentiality agreement’s injunctive relief and mutuality provisions. The employer appealed.

Key Holdings on Appeal

Valid Agreement to Arbitrate

The Second Appellate District rejected the trial court’s finding that conflicting terms regarding FAA applicability and arbitrator selection made the agreement unenforceable. The court held the agreement plainly provided that the FAA applied. The documents contained different arbitrator selection provisions. But both assumed the parties agreed to arbitrate and allowed mutual selection of an arbitrator. They differed only on the fallback process if the parties could not agree.

Individual PAGA Claims Are Arbitrable

The appellate court found the agreement reflected the parties’ intent to arbitrate individual PAGA and Labor Code claims. Wholesale PAGA waivers remain prohibited. But the FAA requires enforcement of agreements to arbitrate individual PAGA claims.

Three of four PAGA provisions validly carved out non-individual PAGA claims. One document contained a wholesale PAGA waiver inconsistent with the others. The court held that the trial court should have resolved this conflict through contract interpretation. If necessary, it should have severed the invalid provision under the severability clause.

Agreement to Arbitrate Was Not Unconscionable

The appellate court found only a low level of procedural unconscionability. The employer presented the agreements on a “take it or leave it” basis. But adhesion alone does not establish a high degree of procedural unconscionability. The trial court relied on a case involving deceptive practices. In that case, the employer distributed a bilingual summary describing only mediation in Spanish. The actual English policy required binding arbitration. The appellate court found no such deception here.

The appellate court also found no substantive unconscionability. The agreement’s severability clause allowed the court to sever the single invalid wholesale PAGA waiver.

Confidentiality Agreement Did Not Exempt Employer From Arbitration

The Second Appellate District rejected the argument that the confidentiality agreement exempted the employer from arbitration. The court harmonized the two agreements: the employer must arbitrate its employment claims, but may also seek injunctive relief in court.

The court held that the confidentiality agreement did not relieve the employer of the burden of proving the likelihood of success at trial or interim harm for preliminary injunctive relief. The agreement stated only that a breach “may” give rise to unfair competition. It did not concede any element needed to obtain an injunction.

Key Takeaways

The Santana decision offers key takeaways for employers structuring arbitration agreements in California.

• Consistency across onboarding documents matters, but ambiguities are not fatal. Minor ambiguities across multiple arbitration documents will not necessarily defeat the parties’ intent to arbitrate.
• PAGA waivers can be severed. Wholesale PAGA waivers remain unenforceable. But agreements requiring arbitration of individual PAGA claims, while carving out non-individual claims, may be enforced under the FAA. Employers will want to ensure consistent PAGA waiver language across their arbitration documents.
• Severability clauses are important. The court relied on the severability clause to sever one invalid wholesale PAGA waiver rather than striking the entire agreement. A well-drafted severability clause can preserve the overall agreement’s enforceability.
• Confidentiality agreement remedies matter. Courts will scrutinize whether a confidentiality agreement’s remedies effectively exempt the employer from arbitrating its own claims.
• Presentation of arbitration agreements still matters. A “take it or leave it” presentation alone does not establish a high degree of procedural unconscionability. But adhesive contracts carry some procedural unconscionability, and deceptive practices or a high degree of surprise may tip the balance toward unconscionability.

Ogletree Deakins’ California offices and California Class Action and PAGA Practice Group will continue to monitor developments and will provide updates on the Arbitration and Alternative Dispute Resolution, California, and Class Action blogs as additional information becomes available.

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Quick Hits

• On April 24, 2026, the Cal/OSHA Standards Board released a revised draft workplace violence rule that includes employer-provided transportation providing that the regulation applies to “all employers, employees, places of employment, employer-provided housing, and employer-provided transportation.”
• The revised draft clarifies that the regulation will not apply to employers when places of employment are not accessible to the public and the employer has fewer than a total of ten employees at the place of employment at all times during the preceding 365 days and is in compliance with the California injury and illness prevention plan regulations.
• The deadline for comments on the revised draft is June 1, 2026.

The draft regulation adds employer-provided transportation within the scope of what is covered. The discussion draft states that the regulation would apply to “all employers, employees, places of employment, employer-provided housing, and employer-provided transportation.”

However, the revised draft clarifies that the regulation would not apply to employers when places of employment are not accessible to the public and the employer has fewer than a total of ten employees at the place of employment at all times during the preceding 365 days and complies with the California injury and illness prevention plan regulations.

The definitions of “authorized employee representative” and “designated representative” were adjusted and added within the regulation.

The language around staffing levels as a workplace violence hazard was updated to delete references to hostile work environments, required and excessive overtime, working in high crime areas, and providing security services.

Employers would still have to offer or make available post-incident trauma counseling.

The draft regulation provides that training not given in person would have to include interactive questions to be answered within one business day by a person knowledgeable about the workplace violence prevention plan.

The crime of stalking under California Penal Code 646.9 was deleted from the definition of workplace violence although it is included in the list of examples of workplace violence hazards. The removal of the Penal Code reference to stalking was a win for California employers that pushed the Standards Board to delete that reference for reasons including the broad definition of stalking included harassment and also could have occurred from another state.

Workplace violence prevention plan

The draft regulation would require a workplace violence prevention plan that includes:

1. the name or job title of the person responsible for the plan;
2. procedures for active involvement of employees in developing and implementing the plan;
3. coordination of the plan with other employers at their worksites;
4. procedures to respond to reports of workplace violence;
5. compliance procedures;
6. communications methodologies for the plan including reporting workplace violence and communicating investigation results;
7. procedures for responding to emergencies;
8. training procedures;
9. procedures for identifying and evaluating workplace violence hazards;
10. methodology for correcting workplace violence hazards;
11. post-incident response procedures and investigation actions; and
12. procedures for review and evaluation of the workplace violence prevention plan.

The Standards Board will accept comments through June 1, 2026, and then provide a final version for the notice and subsequent vote. A vote approving the final draft standard is expected for late summer 2026 with an implementation date of January 1, 2027.

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

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Quick Hits

• The UAE continues to implement sweeping social and employment reforms, raising questions about whether the country is fundamentally modernizing toward a Western model or simply fine-tuning existing frameworks.
• Recent changes include the relaxation of alcohol licensing requirements, the shift to a Monday-Friday work week, and evolving social attitudes—all signaling a more globally aligned approach.
• The UAE remains firmly committed to protecting its workforce and national interests,  as demonstrated by increased enforcement of Emiratization quotas, higher labor law penalties, and stricter processes for filing claims against employers.
• A potential mandatory transition from end-of-service gratuity to savings-based retirement schemes may fundamentally reshape compensation structures for employers and expatriate workers alike.

Social Reforms: Signs of Liberalization

Alcohol licensing relaxation

Recent years have seen significant relaxation of UAE alcohol regulations, though the position differs from emirate to emirate. In Abu Dhabi, the personal license requirement for residents has been fully abolished. In Dubai, the general business license itself remains in place for purchasing alcohol from off-license areas and for home consumption, but since January 2023 the annual fee has been removed and the process simplified to require only an Emirates ID. Sharjah maintains a complete ban on alcohol.

These reforms reflect a broader effort to attract international talent and tourists by removing cost and administrative barriers. Although alcohol remains subject to strict rules across the UAE—including a minimum age of twenty-one, prohibition on public consumption outside licensed venues, and a ban for Muslims—the changes signal a pragmatic acknowledgment of the country’s increasingly diverse population.

The Monday-Friday work week

In January 2022, the UAE became the first Gulf nation to adopt a Monday-Friday work week for federal government entities, shifting from the traditional Sunday-Thursday schedule. This change, which has since been widely adopted by the private sector, aligns the UAE more closely with Western business hours and facilitates real-time collaboration with international partners and clients. The reform also introduced a four-and-a-half-day work week for government employees, with Friday afternoons designated for prayer and family time. For multinational employers, this alignment reduces the “lost day” problem that previously complicated scheduling with headquarters in Europe and the Americas.

Evolving social attitudes

There have been notable shifts in the enforcement and public discourse around personal lifestyle choices, including relationships. While the UAE’s legal framework remains conservative by Western standards, there has been a marked relaxation in practical enforcement, with authorities adopting a more tolerant approach toward private conduct among consenting adults. The decriminalization of cohabitation outside marriage and the relaxation of certain provisions reflect an evolving social contract—one that prioritizes economic development and global integration while maintaining respect for local cultural norms. However, public conduct standards remain in place, so employers may want to ensure that workplace policies continue to reflect local sensitivities.

Employment Law Developments: Tightening the Framework

While social reforms suggest liberalization, the employment landscape tells a more nuanced story. Recent changes indicate that the UAE is not simply adopting Western employment norms but, rather, strengthening protections for its workforce and increasing compliance obligations for employers.

Heightened enforcement of Emiratization quotas

Increasing Emiratization—the requirement to employ certain quotas of Emirati citizens—remains a central pillar of UAE employment policy. Enforcement of required quotas is expected to increase significantly in 2026, except in free zones which remain exempt. The Ministry of Human Resources and Emiratization (MOHRE) has announced plans to use enhanced surveillance mechanisms, including AI tools, to detect avoidance strategies such as hiring Emiratis in roles that do not perform genuine work simply to meet quotas. Companies with fifty or more employees must achieve 10 percent Emiratization of their skilled workforce by the end of 2026, while companies with twenty to forty-nine employees across fourteen designated sectors must employ at least two Emirati nationals.

In a practical accommodation, MOHRE has introduced a resignation grace period: If a UAE national resigns unexpectedly, causing a drop in the company’s Emiratization numbers, employers now have a two-month grace period to hire a replacement before penalties apply.

The voluntary savings scheme: a fundamental shift

One of the most significant potential changes on the horizon concerns the replacement of the traditional end-of-service gratuity system with a savings-based framework. Under Cabinet Resolution No. 96 of 2023, private-sector employers in the UAE can already voluntarily opt into a savings scheme instead of accruing statutory gratuity. The Dubai International Financial Centre (DIFC) has gone further, implementing a mandatory funded savings plan (DEWS).

Signs point to this becoming mandatory more broadly. MOHRE has completed a policy evaluation, is actively consulting stakeholders, and invited proposals through February 2026 to replace the end-of-service gratuity system entirely. Although no official timeline for a permanent transition has been confirmed, industry analysts and labor-market advisors are discussing the potential for a mandated transition timeline sometime in 2026.

The implications are significant: a shift to mandatory savings contributions is likely to result in adjustments to wage growth to offset contributions, along with additional compliance measures for employers. This reform would align the UAE more closely with Western pension models while fundamentally changing the economics of expatriate employment packages.

Modernization or Business as Usual?

The evidence suggests that the UAE is pursuing a carefully calibrated strategy rather than wholesale Westernization. On the social front, reforms to alcohol licensing, the work week, and personal conduct reflect pragmatic adaptations to compete for global talent and investment. These changes remove friction points for expatriates and multinational operations without fundamentally altering the UAE’s cultural identity.

On the employment front, however, the trajectory is more complex. While the voluntary savings scheme and work week changes align with Western practices, the intensified Emiratization enforcement and AI-powered compliance monitoring is simultaneously strengthening—not loosening—its regulatory grip on employers. This is not deregulation; it is strategic modernization with distinctly local characteristics.

For multinational employers, the message is clear: The UAE offers an increasingly attractive environment for doing business and attracting talent, but this comes with heightened compliance expectations. Success requires understanding that the UAE is forging its own path—one that borrows selectively from Western models while remaining firmly anchored in its national priorities.

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

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Quick Hits

• Connecticut has established new workplace standards for large warehouse and distribution center employers, including requirements to provide written notice of performance quotas, maintain work speed data records for three years, and protect covered nonexempt employees from adverse action for exercising their rights under the law.
• The law applies to employers with 250 or more employees at a single Connecticut warehouse distribution center or with 1,000 or more employees across multiple such centers.
• August 1, 2026, is the deadline for providing written quota descriptions to current employees.

The new law goes into effect July 1, 2026, making Connecticut the first state in New England to enact such standards.

Tucked inside of Senate Bill 298’s sweeping provisions are new notice and recordkeeping requirements and protections applicable to certain warehouse and distribution center workers in Connecticut.

Covered Entities

An employer under the law includes any individual, or any legal or commercial entity, that directly or indirectly, at any time in the prior twelve months: (a) employs or exercises control over the wages, hours, or working conditions of 250 or more employees at a single warehouse distribution center in Connecticut; or (b) 1,000 or more employees at one or more warehouse distribution centers in the state.

An employee under the law includes any individual who is employed at a warehouse distribution center and who is a nonexempt employee under the Fair Labor Standards Act (FLSA). A driver or courier traveling to or from a warehouse distribution center is not a covered employee.

Notice Requirements

Notice of quotas

Covered employers must provide each employee with a written description of each quota (defined by law as a work performance standard) to which such employee is subject, including any potential adverse employment action that may result from a failure to satisfy such quota. For current employees, this written description must be provided no later than August 1, 2026. For employees hired after August 1, 2026, such written description must be provided upon hire. The written description of each quota (and any changes to it), can be provided either directly to an employee or via e-mail.

Notice of changes to quotas

Whenever an employer makes a change to an existing quota that results in a new quota for such employee, the employer must:

• Notify the employee of such change as soon as practicable (verbally or in writing) prior to the effective date of such new quota; and
• Provide the employee with a written description of the new quota not later than two business days after the change is made.

Quotas and Work Speed

Restrictions on quota requirements

The law provides that no quota shall:

• prevent compliance with the state’s requirements concerning meal periods;
• interfere with an employee’s use of bathroom facilities, including reasonable travel time to and from the bathroom facilities;
• set a performance standard that measures an employee’s total output over an increment of time that is shorter than the employee’s work day; or
• set a performance standard that is based solely on ranking the performance of an employee in relation to the performance of other employees.

Work speed data and recordkeeping

The law requires a covered employer to establish, maintain, and preserve contemporaneous, true and accurate records of:

• each individual employee’s work speed data,
  • the aggregated work speed data for similar employees at the same warehouse distribution center, and
  • the written description of the quotas provided to each employee.

The law defines work speed data as information an employer collects, stores, analyzes, or interprets relating to an individual employee’s performance of a quota. Records unrelated to quota-based performance standards are not considered work speed data.

Applicable records must be kept for three years. Covered employers are not required to preserve such records if they do not assign or require quotas or if they do not collect, store, analyze or interpret work speed data.

Anti-Discrimination/Retaliation Protections

Covered employers cannot take any adverse action against an employee for failing to satisfy an unlawful quota, or any quota that has not been previously provided to the employee as required by the new law.

If a covered employee believes that satisfying a quota caused or will cause a violation of the lawful quota requirements, the employee may request from the covered employer:

• a written description of each quota to which the employee is subject;
• a copy of the employee’s personal work speed data for the prior ninety days; and
• a copy of the aggregated work speed data for similar employees at the same warehouse distribution center for the prior ninety days.

The law also provides that a former covered employee may make a single request from a former covered employer for:

• a written description of each quota the employee was subject to for the ninety days prior to the employee’s separation from employment,
• a copy of the employee’s personal work speed data for the ninety days prior to such employee’s separation from employment, and
• a copy of aggregated work speed data for similar employees at the same warehouse distribution center for the ninety days prior to such employee’s separation from employment with the employer.

A covered employer that receives such a request from a current or former employee must provide a written copy of the requested records not later than ten calendar days after receipt of the request. The written copy must be provided in both English and the primary language of the employee requesting such records, and for a current employee, directly to the employee or via email. For a former employee, the written copy must be provided either in person at a mutually convenient time or via a mutually convenient delivery method.

Covered employers cannot take any adverse action against any employee or former employee for making a request for records.

Enforcement and Remedies

An employee or former employee, or the attorney general on behalf of a group of employees or former employees, may file a civil action in with the Connecticut Superior Court to recover damages, civil penalties, and/or injunctive relief, based on alleged violations of this law. Attorneys’ fees and costs may also be awarded to prevailing plaintiffs.

Covered employers cannot take any adverse action against covered employees who file a civil action for violation of this law.

Key Takeaways

Employers in logistics and warehouse distribution may want to review performance quotas for compliance with the latest standards and establish proper procedures for all employees before August 1, 2026, the effective date for new notice requirements. Employers may want to provide training on quota notice requirements for human resources and managerial staff.

Employers may also want to ensure information systems can retain and aggregate employee work speed data as required by law.

Employers may want to take into account the burden-shifting analysis when an employee exercises legal rights. Under the new law, if an employer takes adverse action within ninety days of an employee engaging in protected activity, there is a rebuttable presumption that the action was unlawful. The employer must provide clear and convincing evidence that the action was for a permissible reason and not motivated by the employee’s protected activity.

With similar legislation already on the books in a handful of other states, Ogletree Deakins’ Stamford office and Workplace Safety and Health Practice Group will continue to monitor developments and provide updates on the Connecticut, Trucking & Logistics, and Workplace Safety and Health blogs as additional information becomes available.

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Quick Hits

• A Massachusetts federal court extended its preliminary injunction blocking the ACTS survey mandate for twelve intervenor-plaintiffs, representing approximately 178 additional institutions of higher education.
• The court found that the intervenor-plaintiffs were likely to succeed on the merits of their claim that the ACTS survey was adopted in an arbitrary and capricious manner in violation of the Administrative Procedure Act (APA).
• The court concluded it had the statutory authority to stay the ACTS survey nationwide under APA § 705 but declined to do so at this preliminary stage, leaving the survey in effect for the more than 2,000 four-year institutions that are not parties to this lawsuit.

On April 24, 2026, in Commonwealth of Massachusetts v. U.S. Department of Education, U.S. District Judge F. Dennis Saylor, IV, issued a memorandum and order granting the motion of twelve intervenor-plaintiffs for a preliminary injunction enjoining the enforcement of the ACTS survey against them and their member institutions. The order extends the scope of the court’s prior April 3, 2026, preliminary injunction, which had blocked the survey only as to the seventeen original plaintiff states and their constituent colleges and universities. The ACTS survey continues to apply to colleges and universities that are not parties to the litigation.

Background: The ACTS Survey and the April 3 Preliminary Injunction

The ACTS survey is a component of the Integrated Postsecondary Education Data System (IPEDS), a system of interrelated surveys conducted annually by the National Center for Education Statistics (NCES). The survey requires colleges and universities to report detailed admissions data, including information concerning race, ethnicity, gender, family income, parental education, test scores, and grade point averages, for all applicants, admitted students, and enrolled students at both the undergraduate and graduate levels, for the current year and the preceding six years. The survey operationalizes President Donald Trump’s August 7, 2025, memorandum directing the U.S. secretary of education to expand IPEDS data collection within 120 days to ensure compliance with the Supreme Court of the United States’ 2023 decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College.

On April 3, 2026, the court issued a preliminary injunction in favor of the seventeen original plaintiff states, finding that while the U.S. Department of Education likely had the statutory authority to collect the data at issue, the rushed process by which the ACTS survey was adopted, driven by the presidential 120-day deadline, likely violated the Administrative Procedure Act (APA). The court found that NCES failed to engage meaningfully with institutions during the notice-and-comment process to address concerns about the compressed timeline, impaired data quality, increased administrative burden, student privacy risks, and the unavailability of retroactive data. Critically, NCES acknowledged that the only reason it did not use its long-standing Technical Review Panel (TRP) process was the president’s 120-day deadline.

New Intervenor-Plaintiffs

Since the April 3 order, twelve plaintiffs have intervened in the proceeding and now seek the same preliminary injunctive relief. Six of the intervenor-plaintiffs are associations: the Association of American Universities (AAU), which represents seventy-one leading research universities in the United States and Canada (sixty-nine of which are located in the United States); the Association of Independent Colleges and Universities in Massachusetts; the Connecticut Conference of Independent Colleges; the Maine Independent Colleges Association; North Carolina Independent Colleges and Universities; and the Oregon Alliance of Independent Colleges and Universities. In addition, six private colleges intervened individually. Collectively, the intervenors represent approximately 178 institutions of higher education beyond the original seventeen plaintiff states.

The Court’s Analysis

Adopting the reasoning from its April 3 order, the court found that the intervenor-plaintiffs were likely to succeed on their claim that the ACTS survey is arbitrary and capricious in violation of the APA, reiterating that the “principal problem” was the Department of Education’s failure to consider and respond to concerns about its capacity to implement ACTS on an expedited timeline while simultaneously dismantling NCES.

On the issue of irreparable harm, the government argued that many intervenor institutions had already completed or substantially completed the survey, undercutting their claims of immediate injury. The court disagreed, concluding that nearly all institutions continued to face ongoing compliance burdens and an “imminent, non-speculative risk of fines and loss of funding” should the government deem any submission inadequate. The court noted that the presidential memorandum directed the secretary of education to “take remedial action” without any apparent discretion to decline enforcement. On the balance of equities, the court found a “strong public interest in restraining the arbitrary exercise of power by the federal government” and in relieving universities of burdens that could be mitigated through a reasoned administrative process.

Scope of Relief: Party-Specific, Not Nationwide

The court also addressed whether to stay the ACTS survey on a nationwide basis under § 705 of the APA. It concluded that it likely had the statutory authority to do so, reasoning that § 705 authorizes a “temporary form of vacatur” that “acts on the agency action itself”—distinct from the universal injunctions curtailed by the Supreme Court’s June 2025 decision in Trump v. CASA, Inc. Nonetheless, the court declined to exercise that authority, citing concerns about judicial overreach, forum-shopping, and separation of powers, and noting that upward of 2,000 four-year institutions had not sought relief and might not want it. Accordingly, the court issued a preliminary injunction that mirrors the April 3 order but extends only to the six intervenor-plaintiff associations and their member schools and the six private institutions of higher education that also intervened.

Practical Implications for Higher Education Institutions

The court’s April 24, 2026 order significantly expands the universe of institutions shielded from the ACTS survey during the pendency of the litigation. However, the court’s decision not to issue a nationwide stay means that the ACTS survey remains in effect for the more than 2,000 four-year institutions that are not parties to the lawsuit. Those institutions remain subject to the survey’s reporting requirements, including the collateral risk of fines and loss of federal funding for submissions the government deems inadequate.

Notably, the court’s April 24 order has reaffirmed its earlier finding that the Department of Education has the statutory authority to collect admissions data disaggregated by race and other demographics, and that there is no obvious reason to restrict the use of such data for enforcement purposes.

Institutions that have submitted or will submit ACTS data may wish to consider conducting privileged internal analyses of their admissions data to identify potential areas of exposure before the Department of Education undertakes its own review. Given that the presidential memorandum of August 7, 2025, directed the secretary of education to “increase accuracy checks of submitted data” and “take remedial action” where submissions are deemed incomplete or inaccurate, institutions may benefit from understanding their data profiles and any patterns that could attract scrutiny under Title VI of the Civil Rights Act of 1964.

This litigation merits close scrutiny by institutions of higher education. The court has not entered a final judgment holding the ACTS survey unlawful, and the preliminary injunction reflects only a finding that the intervenor-plaintiffs are likely to succeed on the merits. Further developments may alter the compliance landscape.

Ogletree Deakins’ Higher Education 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, Government Contracting and Reporting, Higher Education, State Developments, 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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Chavez-DeRemer Out as Secretary of Labor, Sonderling In. Lori Chavez-DeRemer resigned her position as secretary of labor this week amid an ongoing investigation into her travel and spending practices. Chavez-DeRemer was a controversial appointment from the start of the administration due to her support, while serving in the U.S. House of Representatives, for the union-backed Protecting the Right to Organize Act.

Deputy Secretary of Labor Keith Sonderling is now serving as the acting secretary of labor. Sonderling previously served as a commissioner of the U.S. Equal Employment Opportunity Commission (EEOC) from 2020 to 2024. He also served as acting and deputy administrator of the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) during President Donald Trump’s first administration. Given his background and understanding of the labor and employment policy landscape, many in the business community applauded the administration’s appointment of Sonderling to the deputy secretary role. These feelings are likely to continue now that Sonderling is the acting secretary.

DOL Proposes Joint-Employer Rule for FLSA, FMLA, and MSPA. Acting Secretary Sonderling hit the ground running this week, as the WHD published a notice of proposed rulemaking, “Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act,” on April 23, 2026.

During the first Trump administration, the DOL published a similar joint-employer rule (though limited in applicability to the Fair Labor Standards Act) that went into effect on March 16, 2020. The Trump 1.0 rule was largely invalidated by the U.S. District Court for the Southern District of New York, and was subsequently rescinded by the Biden administration.

The current proposal is very similar to the 2020 rule, as it sets forth the same four-factor test for determining joint-employer status. This test examines whether the putative joint employer

• “hires or fires the employee”;
• “supervises and controls the employee’s work schedule or conditions of employment to a substantial degree”;
• “determines the employee’s rate and method of payment”; and
• “maintains the employee’s employment records.”

Notably, the current proposal differs from the 2020 final rule in some respects, as it takes into consideration some of the conclusions in the federal district court’s September 2020 decision. For example:

• Like the DOL’s new independent contractor proposal, the current joint employer proposal also covers joint employer status under the Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA), in addition to the Fair Labor Standards Act (FLSA).
• The proposal takes a more nuanced approach to one particular element of the “control” factor (“reserved control”) by “not requiring actual exercise of control for there to be joint employment, but recognizing that exercised control is more relevant than reserved control which is rarely or never exercised.” (Emphasis added.) The proposal states that this approach “is more consistent with the FLSA and longstanding caselaw, which focuses both on the ‘degree’ of control and on ‘the economic reality’ of the situation.” (Emphasis in the original.)
• In comparison to the 2020 rule, the proposal also allows more leeway when considering additional factors beyond the four identified factors, such as whether the employee in question has a “continuous or repeated relationship with the potential joint employer” or is economically dependent on the potential joint employer.

Finally, the proposal makes it clear that franchise relationships, on their own, do not make joint-employer status more or less likely. Similarly, “contractual provisions addressing and requiring compliance with general legal obligations or health and safety standards” do not tip the joint-employer scales one way or the other. Public comments on the proposal are due by June 22, 2026. Keith E. Kopplin and Zachary V. Zagger have additional details.

Democratic Senators Seek to Investigate the Administration’s Immigration Processing Practices. This week, Democratic members of the U.S. Senate Committee on the Judiciary sent two letters to the U.S. Government Accountability Office (GAO), regarding the administration’s handling of legal immigration processing.

• The first letter concerns U.S. Citizenship and Immigration Services’ (USCIS) pauses of benefit requests for certain individuals and the U.S. Department of State’s suspension of visa processing for nationals of seventy-five countries. The senators write that these process changes “have left immigrants, their families, and employers at a loss for how to obtain or maintain lawful status or presence” and “are an attempt to circumvent the statutory scheme for lawful immigration to the United States, rather than a legitimate exercise in improving the integrity of our immigration system.” Accordingly, the letter requests that the GAO examine what evidence USCIS and the State Department relied upon to determine that the processing holds were necessary, whether applications continue to be processed during these holds, how much money USCIS has collected in processing fees, and what USCIS’s and the State Department’s plans are for resuming normal adjudication processes.
• The second letter addresses USCIS’s “re-reviews” of refugees admitted into the United States, as well as “re-reviews” of benefit requests granted to certain foreign nationals, during the Biden administration. The letter asks the GAO to examine the evidence used to determine that the re-reviews were necessary, data on the characteristics of individuals selected for re-reviews, how and when these policies were developed, the cost of these re-reviews, and the results of these re-reviews (e.g., were they different from the initial approvals), among other issue areas.

House Republicans Introduce Anti-H-1B Visa Bill. Eight Republican members of the House of Representatives have introduced H.R. 8443, the “End H-1B Visa Abuse Act of 2026.” The legislation would impose a three-year moratorium on the issuance of H-1B visas while enacting the following changes to the H-1B program:

• Eliminating “dual intent,” which allows H-1B visa holders to maintain their status while simultaneously taking steps towards permanent residency in the United States
• Setting the H-1B numerical cap at 25,000 per year, instead of the current 65,000
• Limiting H-1B stays to a maximum of three years
• Codifying President Trump’s $100,000 H-1B visa fee
• Requiring employers filing H-1B petitions to assert that there are no qualified workers for the job and that they have not conducted layoffs in the past year
• Prohibiting H-1B visa holders from working multiple jobs
• Prohibiting third-party or staffing agencies from employing H-1B visa holders
• Prohibiting H-1B visa holders from bringing dependents to the United States
• Eliminating the Optional Practical Training program

The bill is unlikely to become law in this Congress, but it reflects certain lawmakers’ skepticism toward the H-1B program.

Happy Birthday, President Buchanan. The fifteenth president of the United States, James Buchanan, was born on April 23, 1791. An attorney, Buchanan served ten years in the U.S. House of Representatives, followed by eleven years as a U.S. senator, all representing the state of Pennsylvania. Buchanan then served four years as President James K. Polk’s secretary of state. Widely criticized for his failure to forestall the Civil War, Buchanan is also known for the following:

• Buchanan suffered from esotropia, making one eye turn inward. He was also nearsighted in one eye and farsighted in the other eye. These conditions forced Buchanan to tilt his head to one side.
• Buchanan is the only president to never marry. His niece, Harriet Lane, served as First Lady.
• Buchanan is the last secretary of state to later serve as president. Jefferson, Madison, Monroe, John Quincy Adams, and Van Buren all served in the role before ascending to the White House. John Kerry, Hillary Clinton, and Marco Rubio should all take note.

Quick Hits

• The Ninth Circuit ruled that non-mutual offensive collateral estoppel could not serve as a tool to invalidate a swath of arbitration agreements.
• Of the four named plaintiffs who proceeded to arbitration, two arbitrators found the agreement enforceable, while the other two found it unenforceable—but the district court gave preclusive effect only to the rulings that declined to enforce the agreement, invalidating 255 additional arbitration agreements.
• The Ninth Circuit reversed the district court’s ruling, emphasizing that the lower court’s decision clashed with the FAA and its progeny, which require arbitration agreements to be enforced as written and treat arbitration as an individualized proceeding rooted in the mutual consent of the parties.

The decision in O’Dell v. Aya Healthcare Services, Inc., is helpful to employers faced with mass arbitrations and that rely on arbitration programs. The decision underscores arbitration agreements must be individually enforced and courts may not use equitable doctrines like non-mutual offensive collateral estoppel to circumvent this requirement. However, employers may want to proactively review their arbitration agreements to ensure fee-splitting arrangements, venue provisions, and other terms are not so one-sided as to be vulnerable to unconscionability challenges.

Background

Aya Healthcare Services, Inc., is a health care service company that employs travel nurses and supporting clinicians. As a condition of employment, employees were required to execute arbitration agreements that any employment-related disputes be resolved through arbitration. The agreements included a delegation clause that an arbitrator, not the court, would determine whether the agreement was valid. Four former employees brought a putative class action against the employer. The employer moved to compel arbitration and the district court granted the motion, leading to separate arbitrations with each individual plaintiff. However, when the plaintiffs challenged the enforceability of the agreement, the outcomes split—two arbitrators found the agreement enforceable, while the other two found the agreements unconscionable and therefore unenforceable. In the interim, 255 plaintiffs opted into the case through the Fair Labor Standards Act’s (FLSA) collective-action provision. The employer moved to compel each of those opt-in plaintiffs to arbitrate.

The district court then raised the question of whether collateral estoppel prevented the employer from enforcing the arbitration agreement against the newly opted in employees. The district court gave collateral-estoppel effect to the arbitration awards declining to enforce the arbitration agreement, because the court found those arbitrators’ opinions to be better reasoned. Thus, the 255 arbitration agreements of the newly opted-in employees were instantly found unenforceable and the employer was precluded from enforcing the arbitration agreements with its 255 opt-in employees. The Ninth Circuit disagreed with this outcome.

The FAA requires the enforcement of arbitration agreements as written

The Ninth Circuit reversed the trial court’s decision, highlighting that the district court’s approach exhibited the kind of “‘judicial hostility to arbitration’ that the [FAA] was enacted to prevent.” The Ninth Circuit also emphasized how application of non-mutual offensive collateral estoppel to preclude the enforcement of arbitration agreements is incompatible with the FAA. The court observed arbitration agreements are contracts that must be enforced according to their terms, even though the FAA lists valid contractual grounds for revocation may exist (including, for example, fraud, duress, or unconscionability). Offensive non-mutual issue preclusion, however, does not fit into the “generally applicable contract defense” mold the FAA provides, and was improperly applied in this context. This was because the doctrine of issue preclusion does not pertain to a deficiency in the formation or validity of contracts; rather, it is a procedural doctrine that gives preclusive effect to certain prior judgments to avoid relitigation of the same issues.

Consent as a key tenet of the FAA

Next, the court returned to the key theme of the FAA—arbitration being a matter of consent rather than coercion, noting the individualized nature of arbitrations. Arbitrators only derive their jurisdiction through the employer and employee consenting to private dispute resolutions. In this case’s context, hundreds of plaintiffs were estopped from arbitrating their cases, running against a core tenet of the FAA—the parties’ consent.

The court also held the district court’s ruling effectively transformed individualized arbitral proceedings into something resembling a bellwether class action to which the parties never agreed. Essentially, on the basis of just two arbitral awards, the district court foreclosed hundreds of separate arbitration proceedings thereby invalidating hundreds of separate arbitration agreements. The Ninth Circuit observed this approach was troubling because it lacked procedural safeguards inherent in class actions, for example that the named plaintiff’s adequacy.

Key Takeaways for Employers

The decision in O’Dell v. Aya Healthcare Services, Inc., is helpful to employers facing mass arbitrations. The Ninth Circuit’s decision reinforces that arbitration agreements must be enforced as written, on an individual basis. The Ninth Circuit recognized a potentially detrimental application of an equitable legal doctrine as improper—which had the potential to invalidate more than two hundred arbitration agreements. Employers can take some comfort that courts may not use equitable doctrines like non-mutual offensive collateral estoppel to circumvent this requirement under the FAA.

Moreover, even where an arbitrator finds an arbitration agreement unconscionable, that finding does not automatically apply to materially identical agreements with different employees. Each employee’s agreement must be evaluated on its own merits in a separate proceeding.

The court’s opinion also underscores that delegation clauses—provisions requiring an arbitrator, rather than a court, to decide questions about the validity of the arbitration agreement—are enforceable and must be honored.

While this decision is helpful to employers in these circumstances, it does not come without some warnings of potential pitfalls. Two out of four arbitrators found the agreements unconscionable due to one-sided fee and venue provisions. As such, the case still highlights the importance of proactively reviewing arbitration agreements, including provisions regarding fee-splitting arrangements and venue provisions.

Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group will continue to monitor developments and will post updates on the Arbitration and Alternative Dispute Resolution and State Developments blogs as additional information becomes available.

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Quick Hits

• The DOJ ordered the reclassification of certain marijuana and marijuana-containing products from Schedule I to Schedule III controlled substances, potentially reshaping medical research and employer policies around its use. 
• Reclassification could lead to more medical research on marijuana and other non-employment-related impacts.
• Reclassification could also have implications for employers, including the handling of employees who are medical marijuana cardholders, analysis of workplace accommodation requests, and maintaining drug testing and other drug-free workplace policies.
• Employers with U.S. Department of Transportation (DOT)-regulated employees may want to remain mindful of the potential impact of rescheduling, though the specific impact is unknown at this time.

Acting Attorney General Todd Blanche issued a final order, dated April 22, 2026, directing that “drug products containing marijuana that have been approved by the Food and Drug Administration (FDA)” and “marijuana subject to a state medical marijuana license” be immediately placed in Schedule III of the Controlled Substances Act (CSA).

The final order does not legalize marijuana, or cannabis, for recreational purposes on the federal level, nor will it directly impact state legalization. However, beyond the employment implications, it will remove barriers for further medical research on the drug and will allow for the broader manufacture and sale of medical marijuana products.

Attorney General Blanche also provided notice that the Drug Enforcement Administration (DEA) will hold a hearing “with respect to the proposed rescheduling of marijuana into Schedule III of the Controlled Substances Act beginning June 29, 2026.” Per Attorney General Blanche, this hearing “will provide a timely and legally compliant pathway to evaluate broader changes to marijuana’s status under federal law.”

The move stems from President Donald Trump’s December 18, 2025, Executive Order (EO) 14370, which directed the U.S. Department of Justice (DOJ) to expedite the rescheduling of marijuana. That EO followed a Biden administration proposal to reschedule marijuana in 2024, which the DOJ considered but ultimately did not reclassify.

Specifically, the new DOJ final order applies to certain products containing marijuana as defined in the CSA, marijuana extracts, and other compounds derived from the marijuana plant that falls outside of hemp, including delta-9-tetrahydrocannabinol (THC), “to the extent at any of these are included in an FDA-approved drug product or are subject to a state-issued license to manufacture, distribute, and/or dispense marijuana or products containing marijuana for medical purposes.” The final order also directs an expedited registration process for certain entities holding state medical marijuana licenses, allowing those entities to manufacture, distribute, and dispense marijuana for medical purposes under federal law.

Significance of Reclassification

The reclassification is significant in that it shifts federal policy, which has considered marijuana to be a Schedule I controlled substance, defined as drugs with no accepted medical use and a high potential for abuse. That meant federal law did not recognize marijuana as having any legitimate medical purpose, notwithstanding that many states have enacted medical and recreational marijuana legalization laws over the past twenty years.

Schedule III drugs, on the other hand, are defined as substances with “moderate to low potential for physical and psychological dependence”—placing medical marijuana products alongside substances like ketamine, acetaminophen with codeine, anabolic steroids, and dronabinol, a synthetic version of THC used to treat nausea, vomiting, and loss of appetite.

Most immediately, the reclassification will allow more medical research on medical uses for marijuana and make it easier for more potential researchers to enter the space. That could, in turn, impact states in their consideration of whether to legalize medical marijuana or the recreational use of marijuana.

Key Implications for Employers

ADA Reasonable Accommodation Claims

With marijuana drug products rescheduled as Schedule III (acknowledging accepted medical uses), employers may see more employee claims under the Americans with Disabilities Act (ADA), alleging adverse actions were taken against them based on medicinal marijuana use or that employers failed to accommodate the use of medicinal marijuana. Some courts have previously rejected such claims because marijuana was federally illegal, but that reasoning may be challenged under the new framework. However, the order does not usurp or nullify existing state medical marijuana laws, many of which provide express protections for medical marijuana cardholders, or state disability discrimination and off-duty conduct laws, under which medical marijuana cardholders have frequently asserted claims. As such, employers must still consider state drug testing laws, marijuana laws, disability laws, and off-duty conduct laws—which remain a risk for employers as they have in the past.

Workplace Policies and Drug Testing

Even after rescheduling, employers likely retain the ability to:

• Prohibit employee use, possession, or impairment in the workplace 
• Maintain drug-free workplace policies consistent with federal and state law 
• Conduct drug testing, subject to state and local laws 

However, the reclassification of marijuana drug products underscores broader shifting public opinion on marijuana use that could lead to broader legalization. That could lead to increased scrutiny of zero-tolerance policies, particularly regarding off-duty medical marijuana use that does not result in impairment while at work or on the job or otherwise affect job performance.  

The Medical vs.“Non-Medical Use” Distinction

Importantly, the DOJ order distinguishes medical forms of marijuana from non-medical uses, presumably state-approved recreational marijuana, which remains on Schedule I. Specifically,  marijuana and marijuana derivatives contained in FDA-approved drug products and marijuana covered by state medical licenses have moved to Schedule III. The order states that registrations under the order “do not authorize the manufacture, distribution, dispensing, or use of marijuana or products containing marijuana for non-medical purposes.” (Emphasis added). Additionally, synthetic THC remains in Schedule I. This distinction seems confusing on its face since many non-medical, or recreational, marijuana substances contain the “same” THC as FDA-approved and state-licensed marijuana products, and state-approved recreational marijuana is legal to purchase in some states.

Department of Transportation Impact

The impact of the rescheduling on employees subject to U.S. Department of Transportation (DOT) regulations remains to be seen. On December 19, 2025, the DOT issued a policy and compliance notice stating that it would not change drug testing processes or regulations unless and until rescheduling occurs. The DOT’s outright prohibition of marijuana use relies on marijuana’s previous Schedule I classification, but the DOT is not required to change its marijuana policy solely based on the rescheduling. As such, it remains to be seen how the DOT will respond now that marijuana is Schedule III, though additional regulatory guidance is expected.

Next Steps

Employers may want to review and audit drug policies to ensure clarity on federal preemption, safety-sensitive positions, and potential consequences. Employers may also want to be prepared to reassess their reasonable accommodation approaches under the ADA and to consider approaches similar to those employers have used to address state disability laws in the past. Additionally, employers may want to stay updated on anticipated regulatory developments or guidance may be released by the DOT, DEA, and the Department of Health and Human Services (HHS).

Ogletree Deakins’ Drug Testing Practice Group will continue to monitor developments and will provide updates on the Employment Law, Drug Testing, Healthcare, Leaves of Absence, and Trucking and Logistics 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.

Information on state and federal marijuana laws, as well as drug testing requirements, is available on the Ogletree Deakins Client Portal. As new laws are enacted, the Client Portal will provide updates on the Medical Marijuana Law Summary, the Recreational Marijuana Law Summary, and the Drug Testing Marijuana Law Summary. Template policies and full law summaries are available for Premium and Advanced subscribers. Snapshots and updates are available for all registered client users. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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Quick Hits

• The D.C. Circuit held that an off-site repair facility located near a mine and used primarily to service coal haul trucks qualified as a “mine” under the Mine Act but avoided addressing broader MSHA jurisdictional questions.
• After the Supreme Court returned the case following Loper Bright, the D.C. Circuit adopted a fact-intensive test asking whether a facility is “necessarily connected with the use and operation of extracting, milling, or processing coal and other minerals,” finding jurisdiction based on the facility’s proximity to the mine, its mining-related purpose, and the trucks’ exclusive use on mine roads.
• The ruling’s heavy reliance on case-specific facts leaves significant uncertainty about MSHA’s jurisdictional reach over facilities with even slightly different characteristics.

This saga began in 2019 when an MSHA inspector visited a mine to terminate a citation issued for a haul truck operated by KC Transport, Inc. The truck had since been taken to a repair facility—a parking lot and two shipping containers—located 1,000 feet off a haul road, about a mile from the mine. KC Transport used the facility for both mining and non-mining services.

While there, the inspector issued citations for two additional haul trucks also used to haul coal for the mine operator.

KC Transport challenged MSHA’s jurisdiction over trucks located off mine property. The key question was whether the facility met the definition of a “mine” under the Federal Mine Safety and Health Act of 1977 (Mine Act). Specifically, was the repair facility a “facilit[y] … used in, or to be used in, or resulting from” extraction or milling under Section C of that definition?

An administrative law judge found MSHA had jurisdiction, but the Federal Mine Safety and Health Review Commission (FMSHRC) overturned that decision. On this case’s first trip to the D.C. Circuit, the court remanded the case to FMSHRC based on the court’s unique take on Chevron deference. KC Transport immediately appealed the D.C. Circuit decision to the Supreme Court of the United States. After Chevron was overturned in  Loper Bright Enterprises v. Raimondo, the Supreme Court sent the case back for the D.C. Circuit to determine its best reading of the statute.

After that circuitous journey, a majority of the D.C. Circuit panel rejected limiting MSHA’s jurisdiction to extraction sites, appurtenant roads, and preparation sites—in short, mine property—but also rejected a limitless reach for “used in, or to be used in, or resulting from” mining. Instead, the court ruled that a facility is a “mine” under Section C when it is “necessarily connected with the use and operation of extracting, milling, or processing coal and other minerals.”

Applying that test, the court emphasized several factors:

• the facility’s proximity to the mine;
• that it was built with the mine operator’s permission;
• that 60 percent of its services were mine-related; and
• that the trucks operated solely on mine haul roads, extraction sites, and at a preparation plant.

In short, “[t]he cited trucks were actively being used to haul coal from the … extraction site to the preparation plant.” Ultimately, the court found that these factors turned the repair facility into a mine:

“Under the best reading of the statute, a facility that is this close to extraction sites and a preparation plant and used to service trucks that routinely haul coal between those locations, and which is built specifically for this purpose is a ‘mine.’”

The court sidestepped “calls on the margins” such as “the definition of ‘mine’ with respect to moveable objects or items used long ago.” Indeed, the court admitted that the Mine Act’s text—and by extension the court’s decision interpreting that text—“does not provide a framework from which regulated parties can perfectly predict the scope of MSHA’s jurisdiction with respect to all movable objects.”

Unanswered Questions

This decision does little to clarify MSHA’s jurisdictional reach. By avoiding harder questions, the court left boundaries unclear. Here, the key factor was that trucks used in mining were serviced at the facility. But how far does that principle extend? What about a manufacturer sending technicians to service mine equipment? What about a facility that services mine equipment only 20 percent of the time?

Because this decision relies so heavily on the specific facts of the case, it is unclear how even small deviations from those facts might affect future outcomes. Additional uncertainty is the only clear result.

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

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Quick Hits

• Starting no later than January 3, 2028, the FAMLI program will provide most Maryland employees with up to twelve weeks of paid leave for certain family and medical reasons, with a possible additional twelve weeks of leave for parental bonding, per application year.
• The program is funded through employer and employee payroll contributions, which will commence on January 1, 2027, and be administered by the MDOL’s FAMLI Division.
• The final regulations detail key definitions, qualifying events, required documentation, benefit calculations, notice requirements, coordination of benefits, overpayment and fraud procedures, equivalent private plan requirements, and a comprehensive dispute resolution process.

Background on the Law and Final Regulations

As discussed in further detail in our article, Maryland’s FAMLI Program, Part I: An Overview of the Law, Maryland enacted the FAMLI program in 2022 to provide most employees with up to twelve weeks of paid family and medical leave (plus up to twelve additional weeks for parental leave) within a twelve-month period. After several legislatively imposed delays, employer and employee contributions will commence on January 1, 2027, with benefits to begin no later than January 3, 2028.

The MDOL’s final regulations, effective March 30, 2026, implement the law. They are organized into five chapters—General Provisions, Contributions, Equivalent Private Insurance Plans (EPIPs), Claims, and Dispute Resolution—and largely preserve the proposed regulatory framework. The final regulations can be found in Title 9, Subtitle 42 of the Code of Maryland Regulations, COMAR 09.42.01-.05.

Key provisions of the regulations related to EPIPs and dispute resolution are summarized below. Part I of this series addressed online employer accounts and mandatory notices, while Part II covered the claims process and paid leave entitlements.

Equivalent Private Insurance Plans (EPIPs)

The final regulations set out detailed requirements for EPIPs, which may be self-insured or commercially-insured. An EPIP must cover all employees performing qualified employment, pay benefits to any employee who would be eligible under the state plan, allow leave for all FAMLI purposes, provide leave of equal or longer duration, utilize the state’s mandated forms and notices, and calculate benefits that are equal to or greater than those under the state plan. If an employee does not have the requisite 680 hours of service with the current employer, the employer must confirm hours worked for other employers with the state. An EPIP may not impose additional conditions, restrictions, or barriers beyond those authorized by the state plan. Employee withholdings under an EPIP may not exceed what the employee would contribute under the state plan. An EPIP must establish claims processing, reconsideration, and appeals procedures that meet regulatory requirements and certain recordkeeping and additional reporting requirements. The state maintains oversight of EPIPs, which may include compliance reviews.

An employer wishing to utilize an EPIP is required to submit an EPIP application to the MDOL’s FAMLI Division for approval. The final regulations establish a tiered application fee for commercially insured EPIPs based on employer size, ranging from $100 for employers with one to fourteen employees to $1,000 for those with one thousand or more. There is a flat application fee of $1,000 for self-insured EPIPs. Only employers with fifty or more employees may apply for a self-insured EPIP, unless the employer with fewer than fifty employees has a benefits package that has been in effect since on or before July 31, 2026, and that meets or exceeds FAMLI requirements. Applications must be renewed on an annual basis.

Self-insured EPIPs must obtain a surety bond issued by a certified surety company in an amount equal to one year of expected future benefits. The bond must continue for three years after cancellation or EPIP termination and must be reviewed annually by the Division. Employers must maintain a separate account for employee contributions, from which only benefits may be paid.

The final regulations also set out a declaration-of-intent (DOI) process for employers intending to obtain EPIP approval. During a specified submission period, an employer may file a DOI, which must be approved by the Division. From the effective date of the DOI until an EPIP is approved, employers will be exempt from contributions to the state, but they must collect and hold employer and employee contributions in escrow. If the EPIP is subsequently approved, escrowed employee contributions must either be returned or used to fund a self-insured EPIP; if not, the employer is liable for all unpaid contributions plus any applicable interest and penalties for late payment. DOIs expire on December 31, 2027, unless they are terminated earlier by the Division for certain violations. Employers approved via the DOI process must remain in the EPIP for a minimum of four calendar quarters, and early termination may require repayment of some or all of the exempted contributions.

EPIPs may be voluntarily terminated by the employer. They may also be terminated by the Division for various reasons, including failure to submit required reports or failure to comply with the EPIP requirements.

Dispute Resolution

The final regulations establish a comprehensive dispute resolution framework. An employer whose EPIP application is denied or whose EPIP is involuntarily terminated may file a request for review within ten business days, and the Division must issue a decision within twenty business days.

Claimants may request reconsideration of any claims determinations within thirty days, and the Division or EPIP administrator must issue a decision within ten business days. If the reconsideration is adverse, the claimant may appeal to the Division within thirty days. Hearings must generally be held within thirty days of the appeal filing and are closed to the public. The hearing officer must issue a final written order within ten business days of the conclusion of the hearing. Judicial review is available to parties aggrieved by a final order.

Employers may also request reconsideration and appeal of contribution liability determinations within thirty days. Contribution liability hearings must be held within sixty days of the appeal filing, and hearings on contribution liability are open to the public. The hearing officer must issue a final written order, including any penalties or fees, within ninety days of the conclusion of the hearing. An employer may seek judicial review of the final order.

Next Steps

The final regulations took effect on March 30, 2026. Employers may wish to begin preparing for the contribution obligations beginning January 1, 2027, and for the commencement of benefits no later than January 3, 2028, including evaluating whether to participate in the state plan or pursue EPIP approval. Those interested in filing a DOI should be aware that the Division’s submission period is from September 1, 2026, to November 15, 2026. Please see Part I (online account and mandatory notices) and Part II (the claims process and paid leave entitlements) of this series for further information.

Ogletree Deakins’ Baltimore office and Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor developments and will provide updates on the Leaves of Absence and Maryland blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on state family and medical leave laws, including Maryland’s FAMLI program. Premium-level subscribers have access to comprehensive Law Summaries and updated policies; 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.

Please join us on Thursday, May 7, 2026, from 2:00 p.m. to 3:00 p.m. EDT, for a timely webinar, “The Maryland Employer’s Survival Guide: New Laws, FAMLI Regs, and What to Do Now.” Fiona W. Ong and Parker E. Thoeni will discuss all the latest developments for employers. Register here.

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