Quick Hits

• In the event of a discriminatory rejection, employers in Germany are, in principle, liable for lost earnings under Section 15 (1) AGG.
• The claim ends once the affected person has become established in other employment.
• The chain of causation is broken once the person has taken up suitable new employment that has become established.
• Proportionality and the general risks of life limit liability.

The Case—Age Discrimination in an Application for a Trainee Program

An applicant was not admitted to a trainee program because, contrary to the employer’s requirement, he had obtained his university degree more than one year earlier. In 2018, the Hesse Regional Labor Court (Landesarbeitsgericht (LAG)) had already determined that the employer was obliged to compensate for all future material damage resulting from the failure to hire him.

The claimant subsequently demanded approximately EUR 236,000 in lost earnings for a period of several years—the difference between the hypothetical salary had he been hired and his actual income. He took the view that the claim continued without time limit until his retirement. However, he had previously taken up a position commensurate with his qualifications with a public-sector employer and had worked there for several years.

The BAG’s Decision—Established New Employment Breaks the Chain of Causation

The BAG upheld the dismissal of the claim (Ref. No. 8 AZR 153/25).

An employer that violates the prohibition of discrimination is, in principle, obliged to compensate for the material damage—and this claim for compensation is, as to its basis, not limited in scope from the outset. An applicant rejected on discriminatory grounds can therefore, in principle, claim lost remuneration.

The decisive point, however, was the following: The chain of causation between the discriminatory failure to hire and the lost earnings ceases to exist as soon as the affected person has found new, suitable employment and this employment has become established. From that point on, further career development is no longer attributable to the original discrimination, but to the general risks of life. Consequently, the lost earnings claimed by the claimant are not recoverable. The court emphasized that, in line with European Union law, the obligation to pay damages under the AGG is intended to ensure effective compensation, but must at the same time observe the principle of proportionality.

And what if the applicant does not find a new position? The BAG did not have to decide on this scenario. However, there are good arguments against employers being liable until retirement in such a case:

• No right to be hired: Under Section 15 (6) AGG, an applicant who has been discriminated against cannot demand to be hired. Lost earnings until retirement would, in economic terms, amount to precisely such a hiring. It would even protect the applicant better than an employee who was actually hired, whose employment relationship could, for example, be terminated during the probationary period.
• Compensation, not profit: Damages are intended to place the applicant in the position he would have been in had he not been discriminated against, but not in a better position. Anyone who receives compensation for years without working and without bearing the risks of a real employment relationship would be better off.
• Duty to mitigate damages: Unemployed persons who are able to work must make serious efforts to find employment. Failure to do so may reduce or limit the claim.

In cases such as this one, employers may want to request information about the income actually earned and about the claimant’s own job application efforts. In the case decided, the employer had offered the applicant an entry-level position after the rejection and sent him job advertisements in order to demonstrate that reasonable alternatives existed, and thus to limit the lost earnings through the duty to mitigate damages (Schadensminderungspflicht).

Key Takeaways

The decision sets an important limit on the indefinite continuing effect of a damages claim under the AGG. For employers, this means: Even if a court has already issued a final and binding ruling (rechtskräftig) establishing the obligation to compensate for future damage, the claim may cease to exist as to its basis if the affected person has become professionally established elsewhere. In practice, employers facing claims for lost earnings may want to therefore always examine whether the claimant has in the meantime taken up another position commensurate with his or her qualifications. If this is not the case, it may be worthwhile to look at the claimant’s efforts to find a new position: There is much to suggest that a claimant who rejects reasonable offers or does not seriously apply for jobs cannot simply demand permanent compensation for lost earnings on account of the original rejection.

Ogletree Deakins’ Berlin office, Cross-Border Practice Group, and Global Reorganizations Practice Group will continue to monitor developments and will provide updates on the Cross-Border, Germany, and Global Reorganizations blogs as additional information becomes available.

Anna Maria von Lieres und Wilkau is an associate in the Berlin office of Ogletree Deakins.

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

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SCOTUS Ends Legal Challenge Filed by Former NLRB Member Wilcox. The Supreme Court of the United States has denied the petition for a writ of certiorari filed by former National Labor Relations Board Member Gwynne Wilcox, ending her challenge to President Trump’s decision to remove her from the Board in late January 2025. This leaves in place a December 2025 decision by the U.S. Court of Appeals for the District of Columbia Circuit upholding Wilcox’s removal. It also confirms that the Supreme Court’s decision in Slaughter applies to the National Labor Relations Act’s “for-cause” removal protections (which require that members only be removed for “neglect of duty or malfeasance in office”). Future presidents will therefore be empowered to assert political control over the NLRB more quickly, though politics and the U.S. Senate will still have roles to play. Brian E. Hayes and Zachary V. Zagger have more.

EEOC Poised to Scrap Guidance on Disparate Impact. The U.S. Equal Employment Opportunity Commission (EEOC) is on the precipice of rescinding its 1978 Uniform Guidelines on Employee Selection Procedures. As forecast in the Commission’s regulatory agenda, made public in July 2026, a draft final rule rescinding the guidelines is currently under review by the Office of Information and Regulatory Affairs (OIRA). After OIRA completes its review, which usually takes several weeks, the EEOC will issue the rule to rescind the Guidelines. There was no notice-and-comment opportunity for this action.

The guidelines provide employers with a framework for demonstrating that a selection procedure with an adverse impact on certain groups is job-related and consistent with business necessity. EEOC’s pending rescission of the guidelines does not amend federal employment discrimination law, which still allows for a disparate impact theory of discrimination. However, the action is consistent with the Commission and the administration’s broader deemphasis of the theory. (The EEOC’s recent step towards rescinding its guidance on the use of criminal background checks is another example.) In June 2025, the U.S. Department of Justice’s (DOJ) Office of Legal Counsel issued an opinion letter positing that the Uniform Guidelines were both contrary to Title VII of the Civil Rights Act of 1964 and the U.S. Constitution. T. Scott Kelly and Nonnie L. Shivers have additional details.

DOL Scraps Opinion Letters that Contravened Current Law on Tipped Employees. On October 19, 2026, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued Field Assistance Bulletin No. 2026-1, which withdraws three old opinion letters relating to the tip credit and 80/20 guidance for dual jobs. In 2021, under President Biden, WHD finalized its “dual jobs” rule, which implemented a difficult-to-administer standard that requires employees to “receive the full minimum wage from their employer whenever non-tipped, directly supporting work exceeds 20 percent of their workweek or 30 continuous minutes.” That rule was vacated in 2024 by the Fifth Circuit Court of Appeals as being inconsistent with the Fair Labor Standards Act (FLSA). Because the three old opinion letters contained analysis that was rejected by the court in 2024, they “no longer reflect Division policy and, in some respects, do not accurately state the law” and were, therefore, withdrawn.

In the most recent Unified Agenda of Federal Regulatory and Deregulatory Actions, WHD has indicated it will issue a new proposal relating to tipped employees under the FLSA. That proposal was scheduled for release in August 2026, so it should be issued shortly.

GAO Report: OFCCP Should Resume Section 503 Compliance Obligations. An October 2026 report by the Government Accountability Office criticizes the Office of Federal Contract Compliance Programs’ efforts to enforce Section 503 of the Rehabilitation Act of 1973, which prohibits federal contractors from discriminating against individuals with disabilities in employment. Though President Trump revoked EO 11246 (which prohibited covered federal contractors from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin), the Office of Federal Contract Compliance Programs (OFCCP) within the DOL still retains authority to enforce 503, as well as the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).

The report, requested by Senators Bernie Sanders (D-VT) and Kirsten Gillibrand (D-NY), finds that OFCCP has stopped collecting Section 503 Affirmative Action Plans through the Contractor Portal and has also stopped Section 503 compliance audits of select contractors. The report also states that resources on recruiting and retaining individuals with disabilities, as well as guidance on demonstrating compliance with Section 503, have been removed from OFCCP’s website. Accordingly, the report recommends that OFCCP should resume both “collecting certification of AAPs from contractors through its Contractor Portal or other mechanism” as well as “audits related to Section 503 compliance.” In response, DOL stated that it does not plan to resume AAP certification or compliance audits but will continue to investigate individual complaints.

Distill My Heart. This week, the Supreme Court took up a case that will determine the constitutionality of an 1868 law banning the distilling of spirits within homes. As the Buzz has discussed, distilled spirits have been subject to taxation and, therefore, controversy, since the nation’s founding. In 1868, Congress banned distilling spirits at home because this practice made it much easier for home distillers to conceal their alcohol production and avoid paying taxes on their hooch. Violators of the ban are subject to a $10,000 fine, imprisonment for up to five years, or both, for each offense. In this case, distilling enthusiasts challenged the law as violating the Constitution’s Commerce, Taxation, and Necessary and Proper clauses.

The Fifth Circuit Court of Appeals held the ban on in-home distilling violates the Constitution’s Necessary and Proper Clause because it doesn’t advance Congress’s constitutional power to collect taxes. To the contrary, the court maintained, the ban doesn’t facilitate the collection of taxes but instead serves as “an anti-revenue provision that prevents distilled spirits from coming into existence” and is simply “a pure prohibition of conduct that might otherwise have generated taxable products.” The court also reasoned that, under the federal government’s logic, home-based businesses and remote work could be criminalized as well, because both could potentially conceal taxable activity. The federal government subsequently appealed to the Supreme Court.

The Supreme Court is expected to hear oral arguments in the case in early 2027 and issue a decision later in the spring.

Quick Hits

• The November Visa Bulletin shows minimal movement under the Dates for Filing chart, with only the EB-3 “Other Workers” category advancing.
• The Visa Bulletin shows modest movement on the Final Action Dates chart for EB-2 and EB-3 for several chargeability areas. USCIS has confirmed that employment-based adjustment-of-status applicants may file in November using the Dates for Filing chart in the November Visa Bulletin.

Dates for Filing Control for November 2026 Filing Eligibility

The Dates for Filing chart shows no movement from October, except for “Other Workers” in the “All Chargeability” and “Mexico” categories. USCIS has confirmed applicants may use this chart for November employment-based adjustment filings.

That makes filing eligibility and final-approval timing two separate tracks this month: the Dates for Filing chart controls whether Form I-485 can be filed now (along with related Employment Authorization Document (EAD) and advance parole eligibility), while the Final Action Dates chart still controls final approval.

• EB-1: Unchanged
• EB-2: Unchanged
• EB-3: Unchanged
• EB-3 Other Workers: Mexico and China advance to July 1, 2022 (from June 1, 2022)
• EB-5 Unreserved: Unchanged

Source: U.S. Department of State, November 2026 Visa Bulletin

Notably, the EB-2 and EB-3 filing dates for All Chargeability Areas and Mexico (March 15, 2026, and August 1, 2024, respectively) remain well ahead of the corresponding final action dates, so many affected applicants can file in November even though final approval will have to wait. Employees whose priority dates are current under the Dates for Filing chart but not under the Final Action Dates chart may file Form I-485 and may be eligible for interim benefits (an EAD and advance parole) while their cases await final action.

Final Action Dates (Approval/Visa Issuance)

• EB-1: China advances to August 1, 2023 (from July 1, 2023). India is unchanged at February 1, 2023. Rest of World, Mexico, and the Philippines remain current.
• EB-2: Rest of World, Mexico, and the Philippines advance to April 1, 2025 (from January 1, 2025). India remains unchanged at November 1, 2013. China remains unchanged at October 1, 2021.
• EB-3: Rest of World and Mexico advance to June 15, 2024 (from May 15, 2024). China advances to January 22, 2022 (from January 8, 2022). India advances to January 22, 2014 (from January 1, 2014). The Philippines remains unchanged at August 15, 2023.
• EB-3 Other Workers: Rest of World and Mexico advance to June 1, 2022 (from January 1, 2022). India advances to January 22, 2014 (from January 1, 2014). China unchanged at October 1, 2019. The Philippines remains unchanged at January 1, 2022.
• EB-4/Religious Workers: Unchanged at December 15, 2022, across all countries. H.R. 6500 (signed September 2, 2026) extends the Religious Workers category through December 11, 2026.
• EB-5 Unreserved: China is unchanged at December 1, 2016. India is unchanged at December 1, 2023. Rest of World, Mexico, and the Philippines remain current.
• EB-5 Set Aside Categories: Remain current.

Source: U.S. Department of State, November 2026 Visa Bulletin

Because USCIS has authorized use of the Dates for Filing chart, this month’s final action advances primarily affect when pending cases can be approved, not whether new cases can be filed in November. Since USCIS reassesses chart selection monthly, this authorization is not guaranteed to carry into December.

Next Steps

With USCIS’s confirmation that the Dates for Filing chart governs November 2026 employment-based adjustment filings, the gap between the two charts may be relevant to employers and foreign national employees whose priority dates fall between the dates for filing cutoff and the final action date. Some pending applications may also move closer to approval as a result of this month’s final action advances in the EB-1 China, EB-2, and EB-3 categories. Since USCIS evaluates which chart to use monthly, it remains unclear whether the November authorization will extend into December 2026. Even with this month’s progress, applicants chargeable to China and India continue to face significant backlogs in the EB-1, EB-2, EB-3, and EB-5 categories, which may continue to affect long-term work-authorization planning.

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

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Quick Hits

• A claim under Section 12 (3) of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz (AGG)) for measures against a colleague requires that the colleague’s conduct constitutes discrimination based on a characteristic listed in Section 1 AGG.
• Assigning a long-tenured employee to share an office with trainees does not, without more, constitute age discrimination.
• Rudeness is not workplace bullying; conduct rises to that level only when it is systematic and objectively reprehensible.

The Case—Lunch, a Microwave, and a Lost Contact Lens

The plaintiff has worked as an administrative employee at a university of the defendant German state since 1982. She is now close to retirement. She accused a coworker of bullying and based her claim on four incidents:

• The colleague did not help her look for a contact lens. According to the plaintiff, the search took fifteen to thirty minutes.
• The colleague once spoke to her in a harsh tone and then slammed the door.
• The colleague did not acknowledge birthday wishes sent via a text messaging app.
• The shared lunch was moved to another office, along with the microwave.

The plaintiff demanded that the employer—a German state (Land)—terminate the colleague’s employment, or, alternatively, transfer or formally warn the colleague. She also claimed monetary compensation. She alleged age discrimination based on the employer’s suggestion that she move to an office shared with trainees, arguing that the young adults there would have no common conversational topics with her “as an older woman.” The employer offered mediation, which did not take place because the colleague declined.

The Decision—Uncollegial but Not Reprehensible

The Labor Court of Mannheim (Arbeitsgericht Mannheim (ArbG Mannheim)) dismissed the claim in its entirety (Ref. No. 5 Ca 139/25).

A claim under Section 12 (3) AGG failed because none of the characteristics listed in Section 1 AGG were implicated. The court found no indication that the colleague had treated the plaintiff less favorably because of her age or disability.

The court also rejected the claim for compensation under Section 15 (2) AGG. The court stated that it was “not apparent” why sharing an office with trainees should constitute age discrimination against a long-tenured employee. In any event, such a reassignment would be objectively justified because the employer has discretion in deciding how to respond to workplace conflicts.

The court found that workplace bullying (commonly referred to as “mobbing” in Germany) was not established either. Failing to help search for a contact lens or not responding to birthday wishes is, in the court’s view, “uncollegial, socially inattentive, and rude,” but not reprehensible and therefore not a breach of duty. The decisive factor is an objective assessment, not the subjective perception of the person affected. The court held that the employer had already fulfilled its duty of care by suggesting mediation and offering a reassignment.

Key Takeaway—Not Every Conflict Is Discrimination

The ArbG Mannheim’s ruling provides employers with an illustrative reminder that the AGG protects against unfair treatment based on age, but not against every act of rudeness. The decision also offers several insights for employers:

• Responding to conflicts. Employers may want to offer solutions early, such as mediation or separate workspaces. This may be helpful even if the conduct has not yet reached the level of bullying.
• Choosing a move based on objective reasons. Employers do not need to determine who is to blame for the conflict. A move based on objective reasons can usually be defended against claims of age discrimination.
• Documenting the steps taken. In this case, the court was convinced by the offer of mediation, the occupational integration management (betriebliches Eingliederungsmanagement (BEM)) meetings, and the offers to move. Together, these showed that the employer had fulfilled its duty of care.

Ogletree Deakins’ Berlin office will continue to monitor developments and will post updates on the Cross-Border, Employment Law, and Germany blogs as additional information becomes available.

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Quick Hits

• B.C. employers that had fifty or more employees on January 1, 2026, must publish their first pay transparency report by November 1, 2026.
• Reports must disclose gender-based gaps in hourly pay, overtime, and bonuses, as well as the gender makeup of pay quartiles.
• Reporting is an annual obligation.

Which Employers Must Report

Unless exempted by regulation, an employer becomes a “reporting employer” based on its headcount on January 1 of the applicable year, under a phased schedule:

• 2024: 1,000 or more employees
• 2025: 300 or more employees
• 2026: 50 or more employees

Reporting is an annual obligation. After 2026, the threshold remains employers with at least fifty employees, unless a lower number is set by regulation.

Step 1: Collecting Gender Information

For the first reporting year, employers must make reasonable efforts to collect each employee’s self-identified gender category. Going forward, employers must also request this information from new hires when they start and give all employees an opportunity at least once a year to provide or update the information. Employers must inform employees that providing this information is voluntary.

The Pay Transparency Regulation sets three gender categories: “Man,” “Woman,” and “Non-binary.” Any employee choosing not to provide gender information should be marked as “unknown.” “Unknown” covers employees who do not identify with the categories, who prefer not to disclose, or for whom the employer has no information.

Step 2: Selecting the Reporting Period

Employers may choose the twelve-month period the report covers: either the most recently completed financial year, or the calendar year preceding the report year.

Step 3: Preparing the Report

The report must include basic employer information: the employer’s name, mailing address, and NAICS code; the start dates and end dates of the reporting period; and the employee count as of January 1.

The report must show:

• mean and median differences in hourly rate of pay
• mean and median differences in overtime pay and overtime hours
• mean and median differences in bonus pay
• the percentage of each gender category that received overtime pay and bonus pay
• the gender makeup of each of the four pay quartiles, with employees ranked from lowest to highest hourly rate

The hourly rate is the total ordinary pay divided by the hours for which ordinary pay was received. Bonus pay includes commissions, bonuses paid in securities, holiday and year-end bonuses, and profit-sharing.

The government provides an online Pay Transparency Reporting Tool that enables employers to easily create pay transparency reports as required under the Pay Transparency Act and the Pay Transparency Regulation. The tool provides a sample spreadsheet to input employee information and generates a draft report with the necessary calculations to report on pay gaps.

Privacy protections. To preserve privacy, pay data should be suppressed if there are fewer than ten individuals in a gender category.

Step 4: Publishing the Report

Once the report is complete, employers must post it on a publicly accessible website as soon as practicable. Employers without a website must post a copy in a conspicuous place in each workplace and provide a copy to any member of the public on request. The report must remain available until the next report is published.

Obligations Applicable to All Employers

Several provisions of the Pay Transparency Act already apply to every B.C. employer, regardless of size:

• Pay in job postings: Publicly advertised jobs must state the expected wage or salary, or a wage or salary range (in effect since November 1, 2023).
• No pay history questions: Employers may not ask applicants about their pay history, directly or through a third party, unless the information is publicly available.
• No reprisals: Employers may not discipline or otherwise disadvantage employees for asking about their pay, sharing their pay with coworkers or applicants, asking about the pay transparency report, or reporting noncompliance to the director of pay transparency.

Next Steps for Employers

With the deadline fast approaching, employers with fifty or more employees may wish to consider the following steps:

• Confirming their January 1, 2026, headcount to determine whether they are reporting employers.
• Collecting employee gender information promptly, if they have not already done so, and making clear that disclosure is voluntary.
• Confirming that payroll systems can separate ordinary pay, overtime pay, and bonus pay.
• Reviewing any pay gaps before publication and preparing consistent messaging for employee inquiries.

Ogletree Deakins’ Canadian offices, Cross-Border Practice Group, Government Contracting and Compliance Practice Group, Pay Equity Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the firm’s Cross-Border, Government Contracting and Compliance, Pay Equity, and Workforce Analytics and Compliance blogs as additional information becomes available.

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Quick Hits

• The rule would withdraw what the EEOC describes as the UGESP’s “interpretive” portions, which likely include its guidance on identifying adverse impact and validating employment tests and other selection procedures. The UGESP’s recordkeeping requirements are subject to a separate, earlier-stage proposal.
• The final rule’s text is not yet public, and current legal obligations generally remain in place until a final rule is published in the Federal Register and takes effect.
• Disparate impact liability arises under Title VII of the Civil Rights Act of 1964 itself, so rescinding the guidelines would not, on its own, eliminate potential legal claims or exposure.

What It Is

The UGESP has been the federal government’s principal guidance on validating selection procedures since the EEOC, the U.S. Department of Labor (DOL), the U.S. Department of Justice (DOJ), and the Civil Service Commission adopted it in 1978. The final rule (RIN 3046-AB43) would remove the interpretive portions of the EEOC’s version. Those portions tell employers how to show that a procedure with adverse impact is nonetheless job-related and consistent with business necessity.

The rule is the latest step in a broader federal rollback of disparate impact enforcement, consistent with the administration’s priorities. In June 2026, the DOJ’s Office of Legal Counsel issued an opinion, which reflects an executive branch legal position rather than a statute or court decision, concluding that the UGESP embraces an unconstitutional reading of Title VII to the extent it contemplates liability based on disparate effects alone. The opinion also treats common selection procedures, such as background checks and aptitude tests, as presumptively job-related and would require plaintiffs to prove causation and identify an equally effective alternative that causes less disparate impact.

The Office of Personnel Management (OPM) then issued an interim final rule removing UGESP references from federal civil service regulations, effective July 31, 2026. In August 2026, the DOL published a final rule rescinding the Executive Order 11246 regulations, which removes the Office of Federal Contract Compliance Programs’ (OFCCP) version of the UGESP at 41 C.F.R. Part 60-3, effective October 26, 2026. For private-sector employers, the EEOC’s version is the one that matters most, because it is the codification that remains in effect for them.

A separate EEOC proposal (RIN 3046-AB45) would rescind the UGESP’s recordkeeping requirements, including the obligation to retain validation documentation and data permitting analysis of selection procedures by race, sex, and ethnicity. That proposal has not yet been issued for public comment and must still go through the notice-and-comment process. How the two rules will interact is not yet clear, particularly because the EEOC has indicated that its UGESP information collection will be discontinued once the final rule takes effect. Together with the EEOC’s pending proposal to eliminate EEO-1 reporting, rescinding the UGESP recordkeeping requirements could remove the primary federal mandate to collect applicant demographic data, although some state and local requirements would remain. Employers would still be subject to the EEOC’s general records retention rule at 29 C.F.R. 1602.14, which is not part of either UGESP action. Recent EEOC settlements in which the agency relied, in part, on workforce data and alleged that employers failed to keep hiring records show that records continue to matter in intentional discrimination cases.

Who Is Affected

The UGESP applies broadly to tests and other selection procedures used as a basis for any employment decision. The rescission is most relevant to employers that use tests, assessments, structured interviews, or artificial intelligence (AI) tools to assist with hiring, promotion, or other employment decisions.

Multistate employers may face different expectations by location. Fourteen state attorneys general recently issued joint guidance affirming that disparate impact liability remains enforceable. New Jersey has adopted rules codifying disparate impact liability that address automated employment decision tools. Illinois has amended its Human Rights Act to prohibit the use of AI that has a discriminatory effect, and, effective June 1, 2027, to codify disparate impact liability in employment more broadly.

Why It Matters

Under Title VII, an employer whose selection procedure causes a disparate impact must still show the procedure is “job-related for the position in question and consistent with business necessity.” 42 U.S.C. § 2000e-2(k)(1)(A)(i); see also Griggs v. Duke Power Co., 401 U.S. 424 (1971). Rescinding the UGESP removes the roadmap many employers have relied on to meet that burden, not the burden itself.

Federal agency enforcement of disparate impact claims may be limited, given 2025 executive branch directives targeting disparate impact and the DOJ’s view that liability based on disparate effects alone raises constitutional concerns. Private plaintiffs, however, can still bring disparate impact claims under Title VII, and state agencies can pursue them under state law. Some states are also moving in the other direction. As noted above, some states, including New Jersey and Illinois, are moving in the other direction. Courts may continue to treat the UGESP’s validation principles as persuasive, given that those principles rest on decades of validation science and precedent of the Supreme Court of the United States. Professional standards, such as the Society for Industrial and Organizational Psychology’s Principles for the Validation and Use of Personnel Selection Procedures, are not affected by the rescission.

The change may be especially relevant to AI tools used to assist with employment decision-making. Some vendor bias audits and validation reports may rely on UGESP concepts, such as the “four-fifths rule,” under which a selection rate for one group that is less than 80 percent of the rate for the group with the highest rate is generally regarded as evidence of adverse impact. Illinois’s AI law and New Jersey’s rules also address these tools directly. Employers relying on those tools may wish to understand how their vendors’ analyses are structured and whether they will change.

Next Steps

Because the rule is not yet final, current obligations generally remain unchanged. As the rescission approaches, employers may wish to consider the following questions:

• Which selection tools are in use, and which have existing validation studies?
• Do contracts or audit reports for AI tools used in employment decision-making reference the UGESP or its adverse impact measures?
• Do internal policies, training materials, or vendor agreements cite the UGESP and need review once the rule is final? OPM noted that federal agencies may need to update similar materials.
• How would any change to testing validation or data collection practices interact with obligations that remain in force?
• Are validation and workforce records still relevant to defending potential claims, and could changes to retention practices raise spoliation concerns?
• Would adverse impact analyses benefit from being conducted at the direction of counsel to help preserve attorney-client privilege?

Employers will likely wish to carefully strategize before making changes to their selection procedures, validation practices, or recordkeeping. Developments to watch include the following:

• OIRA clearance and a Commission vote to publish the final rule in the Federal Register
• The effective date and the EEOC’s stated rationale in the final text
• Whether the recordkeeping proposal (RIN 3046-AB45) is issued for public comment, and on what timeline
• The status of the EEOC’s UGESP information collection, currently approved through June 29, 2029, which the EEOC is expected to discontinue once the final rule takes effect
• State and local requirements on data collection, AI tools used in employment decision-making, and disparate impact enforcement
• The EEOC’s move to rescind its 2012 enforcement guidance on employers’ use of criminal records, another sign of the agency’s retreat from disparate impact.
• Enforcement activity in the fourteen states whose attorneys general issued joint disparate impact guidance, including actions targeting AI-related practices
• The effect of the December 2025 executive order asserting federal preemption over AI regulation with regard to state rules governing AI tools in employment

Ogletree Deakins’ Artificial Intelligence and Innovation, 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 Artificial Intelligence and Innovation, Diversity, Equity, and Inclusion Compliance, Employment Law, Government Contracting and Compliance, Multistate 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

• TPS for Ukraine and Sudan was scheduled to end on October 19, 2026.
• Pursuant to the updated announcement made on October 19, 2026, TPS Ukraine and TPS Sudan beneficiaries continue to have work authorization.
• USCIS has not announced an extension, a termination, or a new employment authorization document (EAD) auto-extension date.

USCIS’s alert does not announce a formal TPS extension or termination for either country, Ukraine or Sudan. It states that TPS beneficiaries keep their protection and work authorization despite the prior October 19, 2026, end date.

Background

The U.S. Department of Homeland Security (DHS) previously extended TPS for Ukraine and Sudan for eighteen months, through October 19, 2026. USCIS also extended certain TPS-based EADs through that date for beneficiaries with qualifying pending or previously filed EAD applications.

What Employers Should Know

USCIS’s alert states that work authorization for TPS Ukraine and TPS Sudan beneficiaries continues pending a further announcement.

The alert did not announce a formal extension or termination of TPS for Ukraine or Sudan. Despite the prior October 19, 2026, end date, USCIS’s current guidance is that Ukrainian and Sudanese individuals present in the United States under TPS retain their protection, including work authorization, until a further announcement is made. Employers should continue to monitor alerts closely in connection with the TPS designations for Ukraine and Sudan.

Next Steps

Employers may want to consider the following:

• monitoring USCIS updates closely on the TPS Ukraine and TPS Sudan webpages and the Form I-9 Related News page;
• reviewing reverification populations before taking action on Ukraine and Sudan TPS-related documentation; and
• planning for how to document I-9 forms under the latest USCIS guidance.

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

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Quick Hits

• The Supreme Court declined to hear former NLRB member Gwynne Wilcox’s challenge regarding the president’s authority to remove NLRB members, effectively ending her case for reinstatement.
• This decision leaves in place a D.C. Circuit decision holding that the president’s power to remove NLRB members could not be restricted by Congress.
• The decision aligns with Trump v. Slaughter, in which the Court upheld the president’s authority to remove a Federal Trade Commission member without cause. It is now clear that the Slaughter decision extends to NLRB members.

Discussion

The Supreme Court denied the petition for a writ of certiorari in Wilcox v. Trump, without explanation, as is customary. The denial puts an end to Wilcox’s legal challenge seeking reinstatement. In light of its decision in Trump v. Slaughter, the high court saw no need to examine the language of the National Labor Relations Act (NLRA) limiting removal for “neglect of duty or malfeasance in office.” Such congressionally imposed restrictions were held in Slaughter to violate the United States Constitution’s separation of powers.

The denial leaves in place a decision by the U.S. Court of Appeals for the District of Columbia Circuit holding that “Congress cannot restrict the President’s ability to remove” an NLRB member since the agency “wield[s] substantial executive power.” Prior to that ruling, the Supreme Court had stayed an earlier D.C. Circuit ruling in Wilcox’s favor and had declined to grant her earlier petition for a writ of certiorari.

As noted, the petition followed the Supreme Court’s June 2026 decision in Slaughter, which held that the statutory for-cause removal provision for Federal Trade Commission (FTC) members violated the Constitution’s separation of powers because it infringed the power of the executive branch. That decision, which overturned the 1935 precedent in Humphrey’s Executor, reasoned that “for-cause” removal protections for officers of federal agencies wielding significant executive power violated the separation of powers enshrined in the Constitution.

Wilcox, who was nominated by former president Joe Biden in 2021, argued that the NLRB is distinct from the FTC and “unique among independent federal agencies” in that the five-member Board acts as an independent court of appellate-like judges. She argued that “the Board’s removal protections ensure its legitimacy as a neutral arbiter of labor disputes.”

Wilcox and former Merit Systems Protection Board (MSPB) member Cathy Harris had filed legal challenges following their sudden removals by President Trump in 2025, shortly after he took office for his second nonconsecutive term. The Supreme Court declined to hear Harris’s case in June 2026.

Key Takeaways

Wilcox’s case had raised questions about whether the NLRA’s for-cause removal protections restricted the president’s ability to remove NLRB members. The denial of Wilcox’s petition preserves the current composition of the NLRB, which has a 3–1 Republican majority. The denial also avoids serious questions regarding her potential reinstatement after more than a year and how that would impact the legitimacy of Board decisions issued during her time out of office.

Moreover, the Wilcox decision reinforces a central teaching of Slaughter—that so-called “independent agencies” are not actually “independent.” To the contrary, they are directly accountable to the chief executive.

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

• On October 14, 2026, the U.S. District Court for the District of Maryland denied a preliminary injunction sought by five organizations whose members include government contractors, leaving Executive Order (EO) 14398 in effect while the case proceeds.
• The court found the groups were unlikely to succeed on their First Amendment and Fifth Amendment claims because the EO defines the prohibited activities as “disparate treatment based on race or ethnicity,” which is intentional discrimination that federal law already prohibits.
• The court read the EO narrowly, applying only to work performed under covered contracts, and noted that enforcement against lawful DEI-related speech or programs could be challenged as applied.

Judge Adam B. Abelson issued the ruling in National Association of Diversity Officers in Higher Education v. Trump. Three of the plaintiff organizations represent higher education employees; the other two are trade associations of construction contractors. They sought to block executive order (EO) 14398, titled “Addressing DEI Discrimination by Federal Contractors,” and an April 17, 2026, FAR Council memorandum implementing it.

EO 14398 and the FAR Memo

EO 14398, issued March 26, 2026, directs executive departments and agencies to include in contracts and subcontracts, within thirty days, a clause stating that the contractor “will not engage in any racially discriminatory DEI activities,” defined as “disparate treatment based on race or ethnicity” in recruitment, employment, contracting, program participation, or allocation of resources. Noncompliance may lead to contract cancellation, termination, or suspension and ineligibility for future government contracts, and the EO directs the U.S. attorney general to consider False Claims Act (FCA) actions against violators.

The FAR Council’s April 17, 2026, memorandum (FAR Memo) requires agencies to modify existing contracts by July 24, 2026, and includes model contract language identical to the EO’s. The government later agreed not to initiate FCA enforcement related to the EO or FAR Memo until August 7, 2026.

The groups submitted member declarations describing concerns about lost work, canceled contracts, and chilled speech. They claimed the EO is overbroad, discriminates based on content, and imposes unconstitutional conditions, in violation of the First Amendment of the U.S. Constitution; is unconstitutionally vague, in violation of the Fifth Amendment of the U.S. Constitution; and exceeds the president’s authority in its FCA enforcement provision. They also claimed the FAR Memo violates the Administrative Procedure Act (APA).

First Amendment Overbreadth

The court relied on the U.S. Court of Appeals for the Fourth Circuit’s February 2026 decision in an earlier NADOHE lawsuit (NADOHE I), which upheld a 2025 requirement that contractors certify compliance with federal antidiscrimination laws, “which the First Amendment doesn’t confer a right to violate.” EO 14398 does not expressly reference those laws, but the court found it requires compliance with them “impliedly,” because “disparate treatment” has a settled legal meaning: intentional discrimination.

Had the EO simply barred “racially discriminatory DEI activities,” it “may very well have run afoul of the First Amendment,” the court said, because that phrase “is far from self-explanatory.” (Emphasis added).But the clause incorporates the EO’s definition, which limits it to “disparate treatment based on race or ethnicity.”

The court also found that the EO does not reach the groups’ principal examples, such as studying diseases with “disparate negative health outcomes for particular races” or teaching, researching, or publishing on DEI topics, because those activities do not, “without something more, treat anyone less favorably than others because of race or ethnicity.”

Content Discrimination, Unconstitutional Conditions, and Vagueness

For the same reasons, the court rejected the content discrimination and unconstitutional conditions claims, concluding that the groups “lack a protectable First Amendment interest in speech that is prohibited by” the EO “because they lack an interest in speech that is prohibited by federal antidiscrimination law.”

On vagueness, the court held that the clause applies only to work performed under the contract containing it. Enforcement based on conduct or speech outside the contract “may well be unconstitutional retaliation,” the court said, and should be addressed through as-applied challenges.

FAR Memo

The court declined to stay or enjoin the FAR Memo because its requirements are “substantially identical to the requirements imposed by” the EO, and the groups did not show irreparable harm from any provision “distinct” from the contract clause itself. The court did not decide the group’s other APA claims.

Next Steps

The ruling lets the government continue inserting the EO 14398 clause in new and existing contracts, and contractors that agree to it may face FCA exposure if the government believes they are not complying.

However, the court read the EO narrowly. It reaches only intentional discrimination based on race or ethnicity, and only work performed under a federal contract. Enforcement against DEI-related speech or programs that do not involve disparate treatment would be “unauthorized by” the EO and “could very well violate the First Amendment,” the court said. The government also conceded that medical research on diseases that disproportionately affect one race is not barred, and that a contract “could not be terminated” for “talking about historical examples of racial disparities.”

The ruling is unlikely to be the final word on EO 14398. A coalition of nineteen states and the District of Columbia has filed a separate lawsuit, Maryland v. Hegseth, also pending in Maryland federal court, alleging that agency actions implementing EO 14398 exceed statutory authority and violate the APA. Contractors may wish to track agency requests for contract modifications and monitor developments in these challenges.

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 Construction, Diversity, Equity, and Inclusion Compliance, Government Contracting and Compliance, Higher Education, 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

• New Jersey Senate Bill S4685 prohibits law enforcement officers, first responders, CDL drivers, or persons who operate heavy equipment from engaging in the recreational use of cannabis.
• If enacted as proposed, the bill would allow employers to take adverse action against such employees or applicants who use cannabis recreationally, and to conduct random drug tests to enforce compliance.
• S4685 remains pending before the New Jersey Legislature. If enacted, the bill would take effect immediately.

Background

On February 22, 2021, New Jersey’s then-governor, Phil Murphy, signed into law the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), legalizing the recreational use of marijuana for adults age twenty-one and older. CREAMMA prohibits employers from requiring an employee to abstain from recreational cannabis usage while off duty. Nevertheless, employers may still require employees to undergo a drug test based on a reasonable suspicion of an employee’s use of cannabis, upon finding observable signs of intoxication, after a work-related accident, for pre-employment or regular screening, and randomly for safety-sensitive positions.

The Proposed Changes

The proposed bill would both supplement and amend CREAMMA and related laws to prohibit any law enforcement officer, first responder, CDL driver, or employee who operates heavy equipment from using cannabis at any time during the course of their employment, whether on or off duty or otherwise engaged in work responsibilities. Thus, the proposed bill seeks to carve out from CREAMMA’s protections employees engaged in safety-sensitive positions as follows.

Who is covered:

• Law enforcement officers: permanent, full-time members of state, county, and municipal agencies;
• First responders: a law enforcement officer; paid firefighter; paid member of a duly incorporated first aid, emergency, ambulance, or rescue squad association; paid emergency medical technician; paid paramedic; or paid 9-1-1 first responder dispatcher;
• CDL drivers: a person who has been issued a commercial driver’s license and is employed to drive a commercial motor vehicle; and
• Operators of heavy equipment: machinery weighing 5,000 pounds or more, or a vehicle that requires a CDL.

Additionally, the proposed bill would allow employers of such employees to ensure compliance by (1) discharging or taking any punitive action against the employee for engaging in the use of cannabis; (2) conducting random drug tests using scientifically reliable objective testing methods (e.g. testing of blood, urine, or saliva); and (3) refusing to hire a prospective employee for these positions due to their use of cannabis.

According to the proposed bill, evidence of a covered employee’s prohibited use of cannabis could be established simply by the presence of cannabinoid metabolites in the employee’s bodily fluid, even if the same resulted from engaging in otherwise legal, recreational use outside of work.

S4685’s ban applies to cannabis use “as otherwise permitted under the recreational use statute.” The Jake Honig Compassionate Use Medical Cannabis Act, passed in 2019, separately protects registered medical cannabis patients. It is unclear whether the proposed bill applies to employees who are registered medical cannabis patients pursuant to the Honig Act.

Next Steps

The proposed bill has been introduced and remains under consideration.

Employers in New Jersey that employ law enforcement officers, first responders, CDL drivers, or operators of heavy equipment may wish to identify the covered roles and review their drug testing and drug-free workplace policies.

Ogletree Deakins’ Morristown office and Drug Testing Practice Group will continue to monitor developments and will provide updates on the Drug Testing, New Jersey, and Trucking and Logistics blogs as additional information becomes available.

Additional 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 New Jersey Medical Marijuana Law Summary, the New Jersey Recreational Marijuana Law Summary, the New Jersey Drug Testing Marijuana Law Summary, and the New Jersey Lawful Off-Duty Conduct 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.

Michael J. Riccobono is a shareholder in Ogletree Deakins’ Morristown office.

Jessica L. Shinski, a 2026 graduate of the Seton Hall University School of Law, currently awaiting admission to the State Bar of New Jersey, contributed to this article.

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