Quick Hits

• The DOJ issued an opinion finding that the EEOC’s guidelines on disparate impact liability under Title VII are unconstitutional, reasoning that they impose liability on employers based on disparate effects alone without regard to intent.
• The DOJ’s opinion emphasizes that the burden of proof regarding the unreasonableness of an employment practice and its causation of disparities lies with plaintiffs, rather than employers.
• The DOJ also found the EEOC’s guidelines on validation studies and voluntary affirmative action plans inconsistent with Title VII, and in the DOJ Office of Legal Counsel’s view, the Constitution.

The DOJ’s Office of Legal Counsel (OLC) concluded that the EEOC’s Title VII guidelines on disparate impact liability are inconsistent with Title VII and the U.S. Constitution because they potentially hold employers liable for workplace policies or practices that result in disparities based on, for example, race or sex, without regard to employers’ intent, and thereby pressure employers into making conscious employment decisions based on race or sex to avoid liability or a threat of liability.

The OLC opinion stated that it is in response to an inquiry from EEOC Chair Andrea Lucas asking for additional legal analysis on the limits of disparate impact liability, a concept first recognized by the Supreme Court of the United States in its 1971 decision in Griggs v. Duke Power Co. The U.S. Congress later codified the burden-shifting framework for disparate impact liability recognized in Griggs with the Title VII of the Civil Rights Act of 1991, codified at 42 U.S.C. 2000e-2(k). The OLC’s opinion suggests disparate impact liability under Title VII is only tenable for “practices that reflect a significant likelihood of intentional discrimination.”

In a statement, the DOJ was explicit that the opinion “helps to implement” President Donald Trump’s Executive Order 14281, “Restoring Equality of Opportunity and Meritocracy,” which directed federal agencies to stop enforcing disparate-impact liability. Meanwhile, the EEOC has already stopped enforcing claims based on disparate impact theories, and on June 4, 2026, the EEOC issued a national enforcement plan formally prioritizing disparate treatment (intentional discrimination) over disparate impact claims that allege disparities without evidence of a pattern or practice of discrimination.

DOJ’s Framework Puts Burden on Plaintiffs

The OLC said “three corrections” are needed to resolve the tensions between disparate impact claims under Title VII and a “color-blind Constitution.” First, employers’ “business necessity” defense should “not [be] a high bar.” Employers need only show “that the challenged practice is rational, convenient, or helpful for serving a valid business purpose.”

The OLC went on to state that “[e]mployment practices are presumptively job-related, and only irrational or arbitrary practices with no plausible job-relatedness can create disparate-impact liability.” Moreover, “[w]orkplace requirements and selection procedures—such as background checks, aptitude tests, knowledge-based tests, SAT scores, high-school graduation requirements, or blind auditions—are presumptively job-related,” the opinion stated.

Second, the OLC stated that the burden should be on plaintiffs to plead and prove that a specific employment practice caused the disparity, rather than pointing to workforce imbalance or outside social conditions.

Third, the burden should be on plaintiffs, not employers, to identify an alternative practice that causes less disparate impact and is equally effective for the employer’s legitimate needs, including cost and administrability, the OLC stated.

DOJ Objections to Specific EEOC Guidelines

Uniform Guidelines on Employee Selection Procedures

Under the EEOC’s version of the Uniform Guidelines, 29 C.F.R. part 1607, if a “total selection process” (as defined in the guidelines) has an adverse impact then the employer must show both the “validity and utility of” the selection procedure. The OLC found such validation-study requirements to be “inconsistent with Title VII’s business-necessity defense.” The OLC said they improperly shift work to employers, requiring them to isolate the cause of a disparity, even though Title VII places the causation burden on plaintiffs.

Affirmative Action Guidelines

The DOJ also objected to the EEOC’s framework for voluntary affirmative action plans, 29 C.F.R. part 1608, which establishes a process for employers to discover and address potential disparities. But the DOJ stated that these guidelines endorse unconstitutional racial preferences.

While the Supreme Court of the United States has previously held that Title VII permits certain voluntary, remedial race-conscious affirmative action plans, the DOJ opinion criticized those decisions as inconsistent with Title VII and said they have been “fatally undercut” by more recent Supreme Court precedent regarding racial preferences. Regardless, the EEOC has already backed away from voluntary affirmative action plans and recently submitted a proposal to rescind the 1979 interpretive rule on affirmative action under Title VII

Key Takeaways

While the OLC opinion does not entirely dismiss Title VII disparate-impact liability, it construes it narrowly as only an evidentiary tool for identifying practices that create a strong inference of intentional discrimination—not as a freestanding statistical-parity rule. Still, the finding is not a formal court ruling on the merits of disparate impact liability, which will be decided by federal courts.

Moreover, it is important to note that disparate impact claims may still be pursued by private litigants under federal law. In addition, many states recognize disparate impact liability under their antidiscrimination laws and may provide effective guidance on employers’ compliance obligations. Some states have even moved to reinforce or expressly recognize disparate impact liability over the past year in reaction to the federal government’s efforts to deemphasize enforcement on this basis.

As such, employers may wish to consider conducting privileged proactive audits to evaluate workplace practices and document the business reasons for workplace policies and practices.

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

• The Supreme Court ruled that the removal provision for Federal Trade Commission members violates the Constitution’s separation of powers.
• The Court’s overruling of a nearly ninety-year-old precedent could impact the president’s authority to remove leaders of other agencies, such as the NLRB and MSPB.

The Trump v. Slaughter Decision

In Trump v. Slaughter, No. 25-332, the Supreme Court ruled 6–3 against a legal challenge by former FTC commissioner Rebecca Kelly Slaughter. In March 2025, President Donald Trump fired Slaughter, stating that her service was “inconsistent” with the administration’s priorities. The Federal Trade Commission Act (FTC Act) states that commissioners may be removed by the president for “inefficiency, neglect of duty, or malfeasance in office.”

In an opinion by Chief Justice John Roberts, the Supreme Court held that such for-cause removal protections violate the separation of powers and the “unity” of the executive branch.

“What text, history, and structure settle, our precedent confirms—the President may remove his subordinates at will,” the Court stated.

The Supreme Court overruled the nearly ninety-year-old precedent in Humphrey’s Executor v. United States (1935), which had upheld statutory for-cause removal protections for commissioners of independent agencies. The Humphrey’s Executor framework permitted Congress to insulate certain agency heads from presidential removal, provided the agency exercised “quasi-legislative” or “quasi-judicial” functions rather than purely executive ones.

The Supreme Court instead held that agencies wielding executive power must be accountable to the president and that “[t]o remain accountable to the President, those officers must be removable by the President.”

In Slaughter’s case, “[t]he tasks [the FTC] undertakes are the very essence of ‘execution’ of the law—precisely the President’s constitutional role,” the Court stated.

Implications for Wilcox, Harris Appeals

The ruling, while focused on the FTC, could have significant implications for the legal challenges brought by former NLRB member Gwynne Wilcox and former MSPB member Cathy Harris, who were removed from their respective boards by President Donald Trump in early 2025.

The National Labor Relations Act, which created the NLRB, states that the president may remove Board members in cases of “neglect of duty or malfeasance in office.” Members of the MSPB, which adjudicates federal employee appeals and enforces civil service protections, have a similar for-cause removal protection.

The Trump v. Slaughter decision suggests that for-cause removal protections for officers of executive agencies are unconstitutional, and that those officers are subject to at-will removal by the president. Thus, it casts doubt on whether either challenge by Wilcox or Harris seeking reinstatement to their respective boards could ultimately succeed.

Key Takeaways for Employers

For employers, the application of the Slaughter decision could make the NLRB and other executive agencies that regulate employers more responsive to the presidential administration and its policy priorities. However, it also introduces uncertainty, as agency leadership—and thus agency policy—may shift more rapidly with changes in administration.

Employers may want to monitor developments in both the Wilcox and Harris litigation, as lower courts will now need to apply the Trump v. Slaughter framework to determine whether those removals were lawful. If the challenges fail, as now appears likely, the administration’s actions will stand—potentially reshaping these agencies’ direction and priorities for the foreseeable future.

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

• Effective July 1, 2026, Indiana’s FAIRNESS Act bars employers from knowingly or intentionally recruiting, hiring, or continuing to employ unauthorized workers.
• The FAIRNESS Act gives Indiana employers a compliance safe harbor when they use reasonable diligence to verify work authorization before recruiting, hiring, or retaining workers, while allowing the attorney general to seek injunctions and license related penalties if violations are not corrected.
• The FAIRNESS Act authorizes the attorney general to enforce the law through notices, investigations, corrective opportunities, and escalating penalties.

Employer Obligations and Safe Harbor

Under the FAIRNESS Act—the acronym stands for “Forging American Independence, Restoring National Exceptionalism Safely and Securely”—it is unlawful for an “employer” (defined as any person, including an agent, that employs employees in Indiana) to knowingly or intentionally recruit, hire, or continue to employ an “unauthorized alien” on or after July 1, 2026. The term “employ” covers engaging an individual’s services or labor for wages or other remuneration, including suffering or permitting someone to work.

Notably, the FAIRNESS Act, codified at Indiana Code 22-5-9, provides a safe harbor. An employer is not in violation if it engaged in “reasonable diligence” before recruiting, hiring, or continuing to employ the individual. Reasonable diligence includes:

• using an electronic verification of work authorization program operated by the U.S. Department of Homeland Security (i.e., E-Verify) to verify work eligibility, except where circumstances would put a reasonable person on notice that the verification was unreliable; or
• engaging in diligence consistent with industry-standard best practices.

Enforcement and Penalties

The Indiana attorney general (AG) is empowered to enforce the FAIRNESS Act. We anticipate that the AG will use Civil Investigatory Demands (CIDs) to seek information for purposes of FAIRNESS Act investigations. CIDs are a powerful investigatory tool, and preparation for acting promptly is key in case the AG issues an employer a CID.

Before bringing an action for a violation of the FAIRNESS Act, the AG must send written notice of probable cause. The employer then has fifteen business days to either (1) provide evidence of reasonable diligence showing no violation occurred, or (2) submit a corrective affidavit attesting that it has dismissed all undocumented immigrants, confirmed work eligibility for all employees, and will not knowingly employ unauthorized aliens going forward. If the employer satisfies either option, the AG cannot proceed with the action.

If the employer does not satisfy either option and the AG determines that probable cause exists, the AG may bring an action to enjoin the violation and seek additional relief.

The statute establishes a graduated penalty structure tied to an employer’s “operating authorizations” (licenses, permits, certificates, registrations, charters, articles of incorporation, and similar authorizations issued by a state or local governmental body):

• First violation (single): Suspension of all operating authorizations at the location of the violation for five business days.
• First violation (multiple): Suspension at affected location(s) for ten business days.
• Repeat violation: Suspension at affected locations for 180 days.
• After 180-day suspension: Permanent revocation of all operating authorizations at affected locations.
• Willful violations (three or more locations, after prior revocation): Permanent revocation of all operating authorizations statewide.

Courts can also impose probationary status for six months to two years, requiring quarterly compliance reports and sworn affidavits. If an employer violates probation terms, it triggers the applicable operating-authorization penalty. Suspension or revocation of a license does not let an employer off the hook for its tax withholding obligations.

Conclusion

The FAIRNESS Act prohibits Indiana employers from knowingly or intentionally recruiting, hiring, or continuing to employ unauthorized aliens. In light of the FAIRNESS Act’s safe harbor provisions, this is a particularly appropriate time for employers with employees in Indiana to assess their existing employment verification processes and strengthen those processes. In the event an employer receives a CID from the attorney general, it is important that the employer understands its compliance obligations.

Ogletree Deakins’ Indianapolis office will continue to monitor developments and will post updates on the Immigration and Indiana blogs as additional information becomes available.

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Quick Hits

• A new technical release from the DOL states that Trump Accounts for children are not “employee pension benefit plans” governed by ERISA.
• Employers and employees can contribute to Trump Accounts for children.
• Pilot program deposits of $1,000 each from the federal government will begin in July 2026.

Title I of ERISA defines mandatory standards for transparency, fiduciary conduct, vesting, and claims procedures for employer-sponsored retirement plans and health/welfare plans. These rules generally will not apply to the newly established Trump Accounts.

Overview of Trump Accounts

On July 4, 2025, President Donald Trump signed a federal budget reconciliation bill that included a provision to put $1,000 each in Trump Accounts for newborns who are U.S. citizens. For babies born between January 1, 2025, and December 31, 2028, the U.S. government will deposit $1,000 into a Trump Account, invested in a stock-market index fund. The federal deposits are expected to start in July 2026. Contributions can be made by employers, family, and other organizations.

When a Trump Account is opened, the eligible individual under age eighteen is the owner and beneficiary. The money can earn interest over time and be withdrawn any time after the child turns eighteen years old. An employer can contribute up to $2,500 per year to the Trump Account of an employee’s child, and the employer’s contribution will not count toward the employee’s taxable income. The growth period occurs from the date the account is established until January 1 of the calendar year in which the account beneficiary turns age eighteen.

During the growth period, five types of contributions can be made to a Trump Account: (1) a $1,000 pilot program contribution from the U.S. government; (2) qualified general contributions funded by the United States, a state government, the District of Columbia, an Indian tribal government, or a nonprofit organization for members of a qualified class of account beneficiaries; (3) employer contributions that are not includible in the gross income of the employee; (4) qualified rollover contributions; and (5) contributions from other sources, such as the account beneficiary, parents, or any other person.

Qualified general contributions and qualified rollover contributions are not subject to an annual contribution limit. All other contributions during the growth period are capped at $5,000 per year, subject to cost-of-living adjustments after 2027. Unlike contributions to traditional individual retirement accounts (IRAs), contributions may be made to a Trump Account during the growth period even if the account beneficiary does not have taxable income.

Trump Accounts may be invested in a mutual fund or exchange traded fund (ETF) that tracks an index of primarily U.S. companies, does not use leverage, and does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund.

During the growth period, no distributions may be made from a Trump Account, except for qualified rollover contributions, distributions of excess contributions, and distributions upon death of the account beneficiary. After the growth period, withdrawals will be subject to the same tax rules that apply to distributions from a traditional IRA, including regular income taxes and a 10 percent tax penalty on early distributions before age 59½, if there are no exceptions, such as for distributions for qualified higher education expenses or for first home purchases.

ERISA Status of Trump Accounts

The DOL noted in Technical Release 2026-02 that employer contributions to Trump Accounts generally would not be deemed ERISA-covered plans where the account benefits a dependent of an employee, as the accounts would not provide retirement income to an employee and therefore would not satisfy the ERISA definition of a “pension plan.” This ERISA exemption treatment applies whether the employer contributions are made directly or through a cafeteria plan using employee salary reduction contributions.

When a sixteen- or seventeen-year-old employee has not yet reached the end of the growth period, a Trump Account could benefit the employee. In this situation, employer contributions will not cause the account to be subject to ERISA, provided that participation is completely voluntary for employees, and the employer does not (1) impose conditions on utilization of Trump Account funds, (2) make or influence investment decisions, (3) represent that Trump Accounts are an employee benefit maintained by the employer, or (4) receive any payment in connection with a Trump Account.

Both during and after the growth period, an employer may allow an employee to contribute to their Trump Account via post-tax payroll deduction. The employer must continue to comply with the requirements outlined above for employer contributions. The DOL particularly stressed the importance of not endorsing the program and maintaining employer neutrality toward the program. The employer may publicize the program to employees, collect employee contributions, and remit them to the program sponsor. The employer may receive limited compensation from the program sponsor to offset its administrative costs in making employee contributions available.

Employers can offer a hyperlink to the official Trump Account website and place on the company intranet portal Trump Account information provided by IRA sponsors. Employers also can provide neutral information about using the payroll deduction to contribute to a Trump Account, as long as the employer doesn’t vouch for the quality of the specific financial product.

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

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

Katrina M. Clingerman is a shareholder in Ogletree Deakins’ Indianapolis office.

David S. Rosner is a shareholder in Ogletree Deakins’ Washington, D.C., office.

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

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Quick Hits

• The Ninth Circuit ruled the arbitration agreement was enforceable because it was limited to employment-related claims.
• The court clarified that the broad language of “including but not limited to” in the agreement did not render it overly expansive, as other language in the agreement indicated it was limited to employment contexts.
• The court distinguished the case from recent California court decisions that have declined to enforce agreements based on allegations that they are unlimited in scope and duration and lack mutuality.

Conscionability Analysis

The Ninth Circuit rejected the district court’s reliance on recent California state court decisions that called into question the enforceability of employment arbitration agreements where they cover claims unrelated to employment, are of indefinite duration, or cover third-party beneficiaries, including an employer’s non-signatory agents and employees.

Scope

First, the Ninth Circuit found the agreement in question required only arbitration of employment-related claims. The court rejected the district court’s conclusion that the “including but not limited to” language in the agreement made it so broad that it covered essentially any claim. Instead, the Ninth Circuit determined the agreement’s terms were “narrowed by the subsequent list of specific terms: ‘my hiring, my employment, my compensation, and/or the end of my employment, with the Company.’”

Notably, the Ninth Circuit suggested that the agreement was limited in scope (“when it comes to the potential for claims unrelated to employment to arise”) because the employer’s business provided a specific service, as opposed to an arbitration agreement with an employer that has numerous businesses with which a claim might arise outside of the employment context.

Duration

The Ninth Circuit then rejected the district court’s conclusion that the agreement was unconscionable because it was unlimited in duration.

“The fact that the [agreement] is limited to employment-related disputes imposes an inherent limitation on the agreement’s duration,” the Ninth Circuit stated.

Unlike the 2024 Cook case, in which a California appellate court read an arbitration agreement to apply to all claims (even those unrelated to employment), the Ninth Circuit found the agreement in Cocom covered only those claims related to employment. Therefore, claims “stop accruing when the employment relationship ends.”

Mutuality

The Ninth Circuit also rejected the plaintiff-appellee’s contention that the agreement lacked mutuality. Although the agreement covered claims involving the employer’s related entities, officers, directors, employees, clients, and vendors, the court held that any asymmetry did not rise to substantive unconscionability because the agreement’s coverage was limited to employment-related claims. Any potential claims the employee might have against the listed third parties unrelated to their roles with the employer would not be covered by the agreement, the Ninth Circuit stated. The court further noted that arbitration agreements are not unconscionable simply because they benefit third parties.

Preclusive Effect and PAGA Waiver

The Ninth Circuit also found the agreement’s “bar on using arbitration awards for preclusive or precedential effect was not substantively unconscionable,” reasoning that this provision simply restated California’s default rule.

Finally, the court addressed the agreement’s provisions that waived representative actions under California’s Private Attorneys General Act (PAGA), which allows employees to prosecute alleged violations of the California Labor Code by filing lawsuits on their own behalf and/or on behalf of other workers. The Ninth Circuit did not decide whether those waivers were unconscionable, but found that even if they were, they could be severed from the agreement and thereby “vindicate the intent of the parties as expressed in the [agreement’s] severability provision.”

Key Takeaways

The Ninth Circuit’s ruling provides significant clarification on the conscionability of arbitration agreements under California law and highlights potential limits on Cook and other recent California court decisions that have declined to enforce agreements based on allegations that they are unlimited in scope and duration and lack mutuality. Key to the Ninth Circuit’s ruling was the finding that the agreement at issue was limited to employment-related claims, which necessarily limited the agreement’s duration and its application with respect to potential claims outside of the employment context against covered third parties.

In light of this key ruling and recent case law, employers may want to review their employment arbitration agreements to consider whether they are properly limited in scope. The Ninth Circuit’s ruling indicates that clearly specifying in agreements that they are limited to employment-related claims may make them more likely to be held enforceable under California law.

An Arbitration Agreement Package is available through Ogletree Deakins. Additional template packages are also available.

Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group 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

• By a 6–3 vote, the Supreme Court in Lau held that border officers may “parole” a returning LPR based on suspected “commission” of an inadmissibility offense—not based on a conviction or on “clear and convincing” evidence of the commission of an inadmissibility offense—at reentry.
• Paroled LPRs can be physically present in the United States but are not legally admitted, which can disrupt employment authorization and other benefits tied to permanent resident status.
• The ruling primarily affects LPRs with unresolved criminal or other inadmissibility issues.

On June 23, 2026, the Supreme Court issued its decision in Blanche v. Lau, addressing how the Immigration and Nationality Act (INA) treats returning LPRs with potential inadmissibility issues at the border.

In a 6–3 decision, with the majority authored by Justice Clarence Thomas, the Court held that the INA permits border officers to “parole” returning LPRs suspected of inadmissibility issues, rather than admit them in the usual course, without establishing by “clear and convincing evidence” that they are inadmissible. The government may instead establish the relevant inadmissibility basis later during removal proceedings.

Most foreign nationals, including those in nonimmigrant status, such as H-1, L-1, or F-1, must prove admissibility each time they seek to enter the United States. Returning LPRs have traditionally been treated differently. The INA generally treats them as simply returning—not applying for admission.

Background

Muk Choi Lau, a Chinese national, became an LPR in 2007. In May 2012, New Jersey authorities charged him with third-degree trademark counterfeiting. While that charge was pending, Lau traveled abroad, and upon return to JFK Airport on June 15, 2012, the U.S. Department of Homeland Security (DHS) paroled him into the United States under 8 U.S.C. § 1182(d)(5)(A) rather than admitting him outright. In June 2013, Lau pled guilty to the offense charged and received two years’ probation.

DHS then began removal proceedings, charging Lau as inadmissible under 8 U.S.C. § 1182(a)(2)(A)(i)(I) based on a conviction for a crime involving moral turpitude. Lau argued that DHS should not have treated him as an arriving alien based only on a pending, unproven charge. The immigration judge ordered him removed in 2018, and the Board of Immigration Appeals affirmed the decision and dismissed Lau’s appeal in November 2021. In December 2021, Lau petitioned the U.S. Court of Appeals for the Second Circuit for review of the Board of Immigration Appeals’ decision.

The Second Circuit vacated the removal order in 2025, holding that DHS had lacked clear and convincing evidence at reentry to treat Lau as an applicant for admission. The Supreme Court granted certiorari to resolve a circuit split as to when DHS must justify treating a returning LPR as seeking admission.

The Supreme Court’s Holding in Lau

The central question before the Supreme Court was whether border officers must have “clear and convincing” evidence at the time of reentry that an LPR has committed a qualifying offense before they may parole, rather than admit, the person as a returning resident. The Court answered no, adopting a two-step framework: “commission,” not “conviction,” of a disqualifying offense is enough at the border to place an LPR on parole. Conviction may then be established later in criminal proceedings, and immigration authorities can remove the LPR based on that conviction.

The distinction between “parole” and “admission” matters because they carry different consequences. If admitted, an LPR remains in the ordinary posture of a returning resident. If paroled, the person may physically enter the United States but is not legally admitted, which threatens immigration status and work authorization. Picking up on these practical consequences, Justice Ketanji Brown Jackson, joined by Justices Sonia Sotomayor and Elena Kagan, dissented, warning that the ruling could leave some LPRs in limbo with a loss of benefits, including employment disruptions.

Key Takeaways

For employers and foreign national employees, the ruling does not affect most green card holders returning from routine international travel. However, LPRs with pending or unresolved criminal issues should obtain immigration advice before international travel, because reentry may now carry a greater risk, even before a conviction. Future cases may clarify the exact burden border officers must meet to make a parole determination in cases such as this.

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

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

For more insight into this development and other critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

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Quick Hits

• On June 25, 2026, GSA published a notice confirming that Executive Order 14398, applies to “all non-FAR based-contracts,” with GSA, including real property leases, concession contracts, and outleases.
• The clause turns on race- or ethnicity-based actions across five domains, not on whether a program carries a “DEI” label, so a review limited to programs branded as DEI may miss what the clause actually prohibits.
• The notice is a request for public comment, with comments due on or about August 24, 2026 (sixty days after publication).

As a reminder, Section 3 of Executive Order (EO) 14398, “Addressing DEI Discrimination by Federal Contractors,” requires executive departments and agencies, including independent establishments subject to the Federal Property and Administrative Services Act (FPASA), to ensure, in particular, that “contracts and contract-like instruments” include a model clause. That clause contains compliance obligations including providing access to books and records, reporting known or reasonably knowable subcontractor conduct that may violate the clause, reporting filed litigation about conduct that may violate the clause, and more.

The clause is also easy to misread. It applies to agreements above the micro-purchase threshold (currently $15,000) with U.S. performance, flows down to subcontracts at any tier, and carries suspension and debarment as other consequences of noncompliance. Substantively, it prohibits disparate treatment based on race or ethnicity across five domains: recruitment; employment, such as hiring and promotion; contracting, such as vendor agreements; program participation; and the allocation or deployment of resources. A program need not be branded as a diversity initiative to fall within scope, and the clause’s notion of “disparate treatment” is not tied to established frameworks under Title VII of the Civil Rights Act of 1964, so a prior privileged assessment conducted under traditional discrimination standards may not answer the question the clause now poses. The clause also affords the government broad access to a contractor’s books, records, and accounts to ascertain compliance, and contractors should assume that information furnished to a contracting officer could be reviewed by other federal enforcement agencies.

For federal procurement contracts, the Federal Acquisition Regulatory (FAR) Council implemented this executive order and clause via deviation on April 17, 2026 (Federal Acquisition Regulation (FAR) 52.222-90).

Now, the GSA notice seeks clearance, under the Paperwork Reduction Act, for a new information collection that will require certain GSA contractors to furnish the information needed to demonstrate compliance with EO 14398. The collection covers GSA’s non-FAR-based agreements, which the agency describes as “contract-like instruments” and identifies as including leases of real property, concession contracts, and outleases.

The notable feature in this GSA notice is confirmation of the expansive scope. Attention to EO 14398 has so far centered on procurement contracts and FAR 52.222-90. But this notice is separate. It is agency confirmation of the broader scope: “all non-FAR based-contracts.” Specifically, GSA reads the clause to cover lessors, concessionaires, and outlease holders, many of which have not historically considered themselves federal contractors. Leases are a logical starting point for the agency: GSA maintains a public Inventory of Owned and Leased Properties identifying its lessors, a readily available population of counterparties. Affected organizations should not assume that leases mark the limit of the clause’s reach, or that falling outside this particular collection means falling outside the clause.

The GSA notice also estimates 31,384 contracts would be subject to its information collection requirements, with one percent or 314 requiring annual responses. In determining the scope of the information requested, GSA seeks to “mirror the FAR usage of OMB Control # 9000-0034, Examination of Records by Comptroller General and Contract Audit.” That collection requirement, for example, allows the contracting officers “to examine and audit all records and other evidence sufficient to reflect properly all costs claimed to have been incurred or anticipated to be incurred directly or indirectly in performance of a contract” and to interviews of “any current employee regarding such transactions.” GSA estimates that its contracting officers will need sixteen hours to review the information submitted for each response.

Next Steps

Affected organizations, particularly those whose government relationships run through leases, concessions, or outleases, may wish to consider the following:

• Confirming coverage. Organizations may want to determine whether the clause applies to existing instruments and whether it has been, or is expected to be, incorporated by modification.
• Privileged review. Consider an attorney-client privileged review of programs and initiatives across the five domains, together with privileged statistical analyses of hiring, promotion, compensation, performance, and discipline outcomes. A privileged posture allows an organization to identify and address genuine exposure while controlling whether and how sensitive analyses are later disclosed.
• Avoiding overcorrection. The objective is an accurate, defensible assessment of conduct. Eliminating lawful, race-neutral programs out of an abundance of caution may create separate legal risks.
• Commenting. The notice invites public comment for sixty days after publication. Organizations that believe GSA has understated the burden, or that its assumptions do not reflect the realities of leasing and concession arrangements, have until August 24, 2026, to submit comments before the deadline.

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

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

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SCOTUS: President May Terminate TPS for Haitians, Syrians. On June 25, 2026, in a 6–3 decision, the Supreme Court of the United States rejected claims that the administration had unlawfully terminated the Temporary Protected Status (TPS) designations for Syria and Haiti. The administration defended its termination of TPS for Syria (made in September 2025) and Haiti (made in November 2025) by relying on federal law, which states, “There is no judicial review of any determination of the [Secretary of Homeland Security] with respect to the designation, or termination or extension of a designation, of a foreign state.”

Challengers to the termination of the TPS designations claimed that the statute’s language barring review did not apply to the process leading up to the actual decision. The Court found this argument to be “inconsistent with the plain meaning of the statutory text” and explained, “If the final agency action is unreviewable, then so too are subsidiary determinations.” The Court further rejected claims that the termination of TPS for Haiti was grounded in racial animus because public statements made by President Trump and then-Secretary of Homeland Security Kristi Noem were not “overtly racial, and in substance all expressed policy views that could rest on race-neutral justifications.” Ultimately, the Court ruled that the plaintiffs were not entitled to relief that pauses the terminations of the two TPS programs while the underlying litigation proceeds. Jack R. Haverkate has additional details.

In April 2026, the U.S. House of Representatives passed a bill by a vote of 224–204 that would extend TPS for Haiti for three years. The bill is unlikely to gain traction in the U.S. Senate.

Final Duration-of-Status Rule on the Way. The Office of Information and Regulatory Affairs (OIRA) has completed its review of U.S. Immigration and Customs Enforcement’s (ICE) proposed rule that would establish a four-year maximum period of stay for students on F-1 and J-1 nonimmigrant visas. This means that ICE may publish the final rule at any moment.

FLSA Joint Employer Comments Take Procedural Step Forward. On June 22, 2026, the public comment docket closed on the U.S. Department of Labor’s (DOL) Wage and Hour Division’s proposal on “Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act.” The proposal largely tracks the DOL’s 2020 joint-employer rule, which was mostly struck down by a federal court, by setting forth a four-factor test for determining joint-employer status. That test examines whether the alleged employer: (1) “hires or fires the employee”; (2) “supervises and controls the employee’s work schedule or conditions of employment to a substantial degree”; (3) “determines the employee’s rate and method of payment”; and (4) “maintains the employee’s employment records.” At this stage in the rulemaking process, the DOL will review the public’s comments on the proposal and make any necessary changes to the proposal. A final rule will likely be issued in late 2026 or early 2027.

Coming Soon … the Regulatory Agenda? Speaking of rulemaking, the administration’s last Unified Agenda of Regulatory and Deregulatory Actions was published on September 4, 2025. The Buzz previously noted how this lack of rulemaking transparency creates uncertainty for the employer community. Now that we are at the time of year when the Spring Regulatory Agenda is often released, the Buzz is hopeful that it will soon be issued. This will give employers—and all stakeholders—much-needed clarity with regard to the administration’s rulemaking plans for the months ahead.

House Committee Advances AI Information Collection Bill. On June 25, 2026, the House Committee on Education and Workforce voted to approve the AI Workforce Assessment and Research Enhancement (AWARE) Act (H.R. 9381). The bill would require the Bureau of Labor Statistics to collect and compile data on the usage of AI in the workplace. The bill now heads to the House floor.

Lights, Camera, Action … in the Court? The Senate Judiciary Committee has advanced two bills that would allow federal court proceedings to be televised:

• The Sunshine in the Courtroom Act of 2025 (S. 1133) would allow federal district and appellate court judges (including those on the Supreme Court) “to permit the photographing, electronic recording, broadcasting, or televising” of court proceedings. Pursuant to the bill, no media coverage of jurors shall be permitted if the “judge determines the action would constitute a violation of the due process rights of any party,” nor is such coverage of jurors allowed.
• The Cameras in the Courtroom Act (S. 1146/H.R. 2361) applies specifically to the Supreme Court but goes further by mandating “television coverage of all open sessions of the Court unless the Court decides, by a vote of the majority of justices, that allowing such coverage in a particular case would constitute a violation of the due process rights of one or more of the parties before the Court.”

The Judicial Conference of the United States opposes the bills, arguing that “camera coverage can do irreparable harm to a citizen’s right to a fair and impartial trial.” The conference also notes that media coverage of federal court proceedings raises privacy and safety concerns for participants, including federal judges. Finally, the conference warns against the potential creation of “deepfake” judicial proceedings, as well as the cost of retrofitting courtrooms.

Next week’s edition of the Buzz will be published on Thursday, July 2, 2026.

Quick Hits

• Side gigs supported by digital apps are becoming more common.
• State laws may regulate whether an employer can fire a worker for moonlighting.
• Most employees are considered at will, but some have job protections from a union contract or individual employment contract.

It is becoming more common for employees to have side gigs, particularly in roles like food delivery, ridesharing, online tutoring, social media management, creating content as a social media influencer, and reselling goods on online marketplaces.

Several factors govern whether an employer can legally fire or discipline a worker for moonlighting, including whether a union contract, individual employment contract, or noncompete agreement is in place. Without a contract, most employees are considered at will, meaning they can be fired for any reason or no reason at all, unless it constitutes discrimination or retaliation.

Many employers maintain written moonlighting policies, which may require workers to get HR or supervisor approval before starting any outside employment. Likewise, many employers have language in their employee handbooks to bar conflicts of interest or working for a competitor. For example, it may create a conflict of interest if an employee for a well-known multinational hotel chain becomes a popular travel influencer earning money by commenting on a range of hotels, destinations, and tourist attractions.

The purpose of these corporate policies is to prevent damage to the employer’s brand, public reputation, and trade secrets. Companies also may have concerns that outside employment will compromise an employee’s duty of loyalty or create problems related to scheduling, absenteeism, tardiness, and using work time and/or work resources for a side gig. It is generally legal for employers to have policies that prevent workers from using company resources or company time on their outside employment. Some employers’ policies also prohibit employees from mentioning the company’s name or brands, or wearing company merchandise, on personal social media posts without prior written approval.

However, some states have laws that restrict employers from firing or disciplining workers for legal off-duty activities, which may include moonlighting, unless there is a conflict of interest. California, Colorado, and North Dakota protect all lawful off-duty activities, while other states protect certain types of lawful off-duty activities, such as serving in the state legislature, working as an election official, or owning a gun. Washington State has a law stipulating that employers “may not restrict, restrain, or prohibit an employee earning less than twice the applicable state minimum hourly wage from having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self-employed.”

Frequently, religious and political employers are exempt from these types of provisions. For example, a church could legally fire a pastor for having outside employment that conflicted with church doctrine.

Next Steps

Employers may wish to include clear language in employee handbooks about what types of outside employment and conflicts of interest will not be permitted. If moonlighting causes an employee to be late, absent, or less productive at work, it may be helpful to carefully document the dates, times, and other details related to work performance. If employers handle employee discipline and employment termination decisions in a fair and consistent manner, it may reduce the risk of discrimination lawsuits based on race, gender, or other legally protected characteristics.

Ogletree Deakins’ Employment Law Practice Group will continue to monitor developments and will post updates on the Employee Engagement and Employment Law blogs as additional information becomes available.

David C. Castleberry is a shareholder in Ogletree Deakins’ Salt Lake City office.

Michael D. Wilson is a shareholder in Ogletree Deakins’ San Francisco office.

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

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Quick Hits

• Employers may want to ensure they obtain formal employee acknowledgment of every internal policy; without proof that employees knew about a policy, enforcing it becomes extremely difficult.
• Policies must align with Mexican law—including the Federal Labor Law (Ley Federal del Trabajo), the Mexican Constitution, and applicable Official Mexican Standards (Normas Oficiales Mexicanas or NOMs)—rather than relying solely on global standards.
• To lawfully impose disciplinary sanctions, employers must have internal work regulations (reglamento interior de trabajo) in place that comply with the Federal Labor Law.

Mexico is a heavily regulated country, from the Political Constitution of the United Mexican States to the Federal Labor Law to Normas Oficiales Mexicanas (NOMs) governing health and safety, as well as other secondary provisions. These local requirements could limit or impact global policies, as mandatory local compliance is required.

Below are key tips to ensure that policies have a better chance of being enforceable:

1. Formal Employee Acknowledgment

If an employer cannot demonstrate that an employee was made aware of a particular policy, enforcing that policy whether through disciplinary measures or in proceedings before labor authorities becomes significantly more difficult.

2. Alignment With Mexican Law

Internal policies built on the foundation of Mexican labor law, not merely imported from a global template, are better positioned for enforceability. The Federal Labor Law, the Mexican Constitution, Official Mexican Standards, and local regulations all impose specific requirements. A policy that is perfectly lawful in another jurisdiction may conflict with Mexican rules and become unenforceable or even expose the employer to liabilities.

3. Language Considerations

Even when an organization operates globally in English, Mexican employees and authorities expect documentation in Spanish. A policy that exists only in English can face serious enforceability challenges.

4. Periodic Review and Updates

Mexican labor law evolves frequently. Recent years alone have brought reforms related to outsourcing, telework, vacation entitlements, workplace violence prevention, and workweek reduction. Employers may want to review their internal policies periodically to ensure they reflect both current legislation and the way the company actually operates.

5. Preservation of Unwaivable Rights

Global policies sometimes include provisions such as broad liability waivers, noncompete clauses with no temporal or geographic limits, or benefit structures that fall below statutory minimums that may conflict with protections Mexican employees are entitled to by law. Under Mexican labor law, employee rights are generally considered unwaivable. Employers may want to verify that their policies preserve local entitlements before rolling them out in Mexico.

6. Local Culture and Operational Realities

What feels proportionate and reasonable in one country may not translate effectively in Mexico. Policies should be practical, written in clear language, and proportional to the conduct they address.

7. Internal Work Regulations: A Prerequisite for Disciplinary Sanctions

As an additional and critical consideration, employers may want to be aware that to lawfully impose a disciplinary sanction on an employee, they must have internal work regulations (reglamento interior de trabajo) in place. Without properly established internal work regulations, an employer’s ability to impose workplace sanctions lacks the legal foundation required under Mexican law.

In light of these considerations, employers may want to prioritize audit-ready documentation, ensure internal policies reflect current Mexican law, and conduct periodic compliance reviews. Companies with operations in Mexico that have not yet localized their global policies or formalized their internal work regulations may want to take action now to reduce enforceability risks and ensure they are prepared for future regulatory developments.

Ogletree Deakins’ Mexico City office will continue to monitor developments and will post updates on the Cross-Border, Leaves of Absence, Mexico, Unfair Competition and Trade Secrets, Wage and Hour, and Workplace Safety and Health blogs as additional information becomes available.

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