Quick Hits

• Effective January 1, 2027, private employers in Alabama may voluntarily adopt written hiring and promotion preference policies for veterans, spouses of veterans, and spouses of active-duty service members.
• Employers that implement such policies must notify the Alabama Department of Workforce.
• The Alabama law’s definitions of veterans and active-duty service members may be narrower than those under USERRA.

HB 307

On April 16, 2026, Alabama Governor Kay Ivey signed into law House Bill (HB) 307, Act No 2026-574, titled, “Expanding Employment Opportunities for Military Families in Alabama,” along with a broader package of legislation intended to assist military families. HB 307 replaces former Alabama Code Section 36-226-15 and takes effect on January 1, 2027.

While the new law primarily applies to access to state employment for uniformed service personnel, Section 3 of the law permits private employers to adopt voluntary hiring preference policies for veterans, spouses of veterans, and spouses of active-duty service members.

Any such voluntary policy must be in writing and uniformly applied to the hiring and promotion decisions of the employer. HB 307 also provides that any such policy will apply to veterans who can provide proof of service and honorable discharge via DD 214 (Certificate of Release or Discharge from Active Duty) forms, spouses of veterans who can provide relevant DD 214s and proof of marriage to eligible veterans, and spouses of active-duty service members who can provide proof of the active-duty status and proof of marriage to the active-duty service members. Any preference afforded to the spouse of an active-duty service member is “limited to the time during which the service member remains on active duty and up to 180 days after the service member’s discharge or separation from service.” The statute provides no details on how the hiring preferences in these voluntary programs should be structured.

Any private employer that voluntarily implements such a policy must notify the Alabama Department of Workforce (ADOW), which is directed to use that information to create a registry of employers that have voluntary veterans’ preference employment policies. ADOW is required by HB 307 to make this registry publicly available on its website, and to establish and maintain a page on its website through which employers may provide this information. Any such voluntary veterans’ preference policy shall not be considered a violation of “any state or local law.” Title VII of the Civil Rights Act of 1964 provides a carveout for veterans’ hiring preferences, so implementing such a policy is unlikely to constitute a violation of Title VII, 42 U.S.C. § 2000e-11 (1982).

HB 307 and USERRA

Interestingly, HB 307’s application to veterans and active-duty service members may be more limited than as defined by the federal Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). HB 307 defines an “active-duty service member” as “[a]n individual who is on active duty as a member of the National Guard or a reserve or active component of the Armed Forces of the United States.” Likewise, HB 307 defines an “eligible veteran” as “[a]n individual who has ever served in the National Guard or a reserve or active component of the Armed Forces of the United States and been honorably discharged.” By contrast, USERRA broadly defines “service in the uniformed services” to encompass HB 307’s definitions, as well as service in State active duty, the National Urban Search and Rescue Response System, and the Federal Emergency Management Agency under certain circumstances.

Staying Informed

Ogletree Deakins’ Military Workforce Practice Group will continue to monitor developments and will provide updates on the Alabama and Employment Law blogs as additional information becomes available.

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Quick Hits

• Under the Accessibility for Ontarians with Disabilities Act (AODA), companies with twenty or more employees in Ontario must file an accessibility compliance report by December 31, 2026.
• The AODA applies to provincially regulated organizations in the Province of Ontario, Canada.
• Failure to submit the report may lead to potential enforcement action.

Background Facts

Enacted in 2005, the AODA is Canada’s oldest and most fulsome accessibility legislation.

Provincially regulated organizations are required to meet the standards set out in the AODA and its regulations if they operate in Ontario.

Organizations will be considered to operate in Ontario if they provide goods, services, or facilities; employ people; offer accommodation; own or occupy a building, structure, or premises; or are engaged in business in Ontario.

Preparing for Compliance

Every three years, organizations covered by the AODA that have twenty or more Ontario employees (including full-time, part-time, seasonal, and fixed-term contract employees) must submit a report regarding their compliance to the Ontario Ministry of Seniors and Accessibility via the Accessibility Compliance Portal.

Failure to submit the report may lead to potential enforcement action.

To prepare, employers should access the Accessibility Compliance Portal to update their organization profile and review the questions that the organization will be required to answer.  The questions track closely with the requirements set out in the Integrated Accessibility Standards (Ontario Regulation 191/11). Once the organization is satisfied with its answers to the questions set out in the accessibility compliance report, the organization can finalize and submit the report.

Ogletree Deakins’ Toronto office and Disability Access Practice Group will continue to monitor developments and will post updates on the Canada, Cross-Border, and Disability Access blogs as additional information becomes available.

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Quick Hits

• Twenty states and the District of Columbia, acting in their capacity as federal contractors, have filed suit challenging the FAR Council’s implementing actions for EO 14398, arguing those actions exceed the agency’s statutory authority and were issued without the notice-and-comment process required under federal procurement policy requirements.
• The state coalition targets the agency implementing actions under the APA, arguing they are procedurally defective and the resulting contract terms too vague to enforce.
• Another lawsuit challenges the executive order on First Amendment grounds and alleges the FCA materiality provision exceeds presidential authority under the Procurement Act.

The lawsuit, Maryland v. Hegseth, does not challenge the executive order itself. Rather, it takes direct aim at the federal agency actions implementing the order, arguing those actions violate the Administrative Procedure Act (APA) by exceeding statutory authority, bypassing mandatory notice-and-comment procedures, and producing contract terms so vague as to be arbitrary and capricious. For federal contractors and subcontractors currently navigating compliance with EO 14398, the lawsuit raises the possibility of court intervention before the July 24, 2026, deadline for bilateral modification of existing contracts.

Background: EO 14398 and Its Implementation

EO 14398, titled “Addressing DEI Discrimination by Federal Contractors,” requires federal agencies to insert a mandatory contract clause into all contracts, subcontracts, and “contract-like instruments” prohibiting contractors from engaging in “racially discriminatory DEI activities,” defined as disparate treatment based on race or ethnicity in recruitment, employment, contracting, program participation, or the allocation or deployment of an entity’s resources. Noncompliance risks include contract cancellation, debarment from future federal contracts, and potential liability under the False Claims Act.

Pursuant to EO 14398, the Federal Acquisition Regulatory Council (FAR Council) issued a memorandum dated April 17, 2026, directing agencies to adopt Federal Acquisition Regulation (FAR) deviations incorporating the new contract clause, designated as FAR 52.222-90. The memorandum set an April 27, 2026, deadline for agencies to adopt those deviations and instructed agencies to make every effort to bilaterally modify existing contracts by July 24, 2026. Multiple agencies, including the National Aeronautics and Space Administration (NASA), the Consumer Product Safety Commission, and the National Science Foundation, moved to adopt class deviations consistent with the FAR Council’s instructions.

The plaintiff states span twenty jurisdictions, from California and Illinois to Virginia and Wisconsin, and collectively hold hundreds of federal contracts worth billions of dollars annually. The complaint alleges that the “abrupt and unlawful rollout of Executive Order No. 14398 and its implementation threatens grave and irreparable harm to the States’ economic interests and their ability to serve the public.”

Legal Grounds Challenging the Agency Actions

The complaint brings two counts, both under the APA. The lawsuit targets agency-level implementing actions rather than the executive order itself and does not raise claims under the First Amendment of the U.S. Constitution or other constitutional claims.

Count I: Procedural Violations and Excess of Statutory Authority

The states allege the FAR Council and other federal agencies exceeded their statutory authority and violated mandatory procedural requirements. Specifically, the complaint alleges:

• The new contract terms and policies have a significant effect on contractors and impose significant compliance costs, and thus were required to be published for public comment in the Federal Register at least sixty days before taking effect under 41 U.S.C. § 1707, the statute governing federal procurement policy. Neither the FAR Council nor any agency complied with that requirement, and no valid waiver was invoked.
• The FAR Council’s April 2026 memorandum exceeded the authority granted to it under 41 U.S.C. § 1303, which authorizes the FAR Council to manage and coordinate the FAR, not to prescribe agency deviations, direct agency procurement activities, or set mandatory deadlines for bilateral modification of existing contracts.
• The agency class deviations are unauthorized under the FAR’s own provisions, which permit deviations only “‘when necessary to meet the specific needs’” of an individual agency and do not permit deviations to implement a new governmentwide policy.
• The False Claims Act (FCA) materiality clause in FAR 52.222-90 is contrary to law. The provision purports to make compliance with the clause “material” under the FCA, but under controlling Supreme Court of the United States precedent, “[m]erely labeling a clause ‘material’ does not make it so.” This matters for contractors and subcontractors because the clause, as drafted, purports to expose them to FCA liability for noncompliance with contract terms that the states argue have not been lawfully adopted.
• The agencies also violated the Paperwork Reduction Act by imposing reporting and recordkeeping requirements without first completing the required notice-and-comment process and obtaining Office of Management and Budget approval.

Count II: Arbitrary and Capricious Agency Action (APA)

The states separately allege the implementing actions are arbitrary and capricious because the agencies failed to adequately explain what the new contract terms mean or require and failed to explain how they differ from antidiscrimination requirements previously and currently applicable to federal contractors. The complaint identifies several ways this vagueness causes concrete harm:

• Contractors are left to guess whether common antidiscrimination and outreach activities might constitute prohibited “disparate treatment” in recruitment or resource allocation. The complaint offers concrete examples: forwarding a job listing to an associate at a historically Black college, attending a job fair in a predominantly white rural community, or responding to workplace incidents of antisemitism by training employees and distributing educational materials. It is unclear under the current contract terms whether any of these activities would be prohibited.
• The definition of “racially discriminatory DEI activities” echoes existing prohibitions on discrimination based on race or ethnicity but provides no meaningful guidance on whether, or how, it imposes requirements beyond those already applicable under Executive Order No. 11246 (rescinded) or its successor, Executive Order No. 14173.
• The vagueness is compounded by the ancillary requirements attached to FAR 52.222-90: broad records-access requirements, obligations to report possible subcontractor violations, and the threat of FCA liability. The complaint argues “[i]t is unreasonable to demand that contractors identify possible violations of a requirement that itself has not been defined clearly.” (Emphasis in original.)
• The agencies failed to account for the reliance interests of federal contractors and subcontractors that have designed their employment, subcontracting, and compliance policies and practices based on federal statutes and controlling decisional law in effect for decades.

Relationship to the April 2026 Constitutional Challenge

Federal contractors and subcontractors now face a litigation environment in which EO 14398 is being challenged on two independent fronts. Either case could produce injunctive relief affecting contract compliance obligations.

The April 2026 constitutional challenge filed by the National Association of Diversity Officers in Higher Education (NADOHE) and a coalition of higher education and minority trade associations focused on First Amendment violations, alleging the order chills protected speech and association, imposes unconstitutionally overbroad and content-based restrictions on contractors, and that the EO’s FCA materiality provision exceeds presidential authority under the Procurement Act.

The state coalition’s APA lawsuit operates independently and on different legal footing. By targeting agency-level implementing actions rather than the executive order itself and relying exclusively on APA grounds, the states position themselves to seek vacatur of the FAR Council’s April 2026 memorandum and the agencies’ class deviations without the court needing to reach constitutional questions. The complaint also introduces a procedural angle not present in the NADOHE case: the argument that the FAR Council and agencies were required to conduct public notice and comment before implementing these contract terms and failed to do so.

Next Steps

Maryland v. Hegseth is the latest challenge to the Trump administration’s executive orders seeking to eliminate DEI programs among federal contractors, and sets the stage for additional potential court orders affecting implementation of EO 14398. While the requested injunction is limited to the plaintiff states, a court order vacating the FAR Council memorandum and agency class deviations would have governmentwide effect. All federal contractors and subcontractors, not only those in plaintiff jurisdictions, have reason to monitor this litigation closely. Given the evolving litigation landscape, federal contractors and subcontractors may wish to assess their current posture and consider the following steps:

Bilateral modification requests. Contractors and subcontractors that have received or anticipate receiving requests from contracting officers to execute bilateral modifications incorporating FAR 52.222-90 may wish to consider the legal ramifications in advance of the July 24, 2026, deadline, particularly given the pendency of this litigation. The potential contract consequences of declining to agree to a modification are among the considerations that may warrant early legal guidance.

Consider a qualitative and quantitative privileged review of workforce programs. Contractors and subcontractors may wish to conduct a privileged review of existing antidiscrimination, outreach, recruiting, and workforce compliance programs, including privileged workforce analytics for legal risk mitigation. The complaint itself identifies uncertainty about whether common activities such as targeted recruiting outreach and workplace antisemitism training fall within the scope of FAR 52.222-90. Recent enforcement actions have demonstrated that the government conducts its own workforce analytics using employers’ raw data; organizations that have conducted their own privileged analysis in advance are better positioned to provide context and explanations if questions arise.

Understand the FCA compliance certification risk. FAR 52.222-90 includes a materiality clause representing that compliance is material to the government’s payment decisions under 31 U.S.C. § 3729(b)(4). Under the FCA, “knowingly” includes acting in “deliberate ignorance” or “reckless disregard” of the truth. 31 U.S.C. § 3729(b)(1). Contractors and subcontractors may wish to assess how their existing compliance programs relate to the certifications being made on each invoice submitted under a covered contract.

Consider preserving documentation of existing compliance practices. Contractors and subcontractors may also wish to consider how their existing employment and compliance programs are documented in relation to federal antidiscrimination statutes and controlling case law. The states’ reliance-interest argument in this lawsuit suggests that the history of how compliance programs were designed and grounded in existing law may be relevant both to any litigation outcome and to agency compliance reviews.

Records-access considerations. FAR 52.222-90 requires contractors to provide broad access to books, records, and accounts for compliance review. Given the clause’s vague scope, contractors and subcontractors may wish to consult with counsel regarding what records could be subject to demand and how workforce analytics and compliance documentation is currently structured.

Monitor both active challenges. Track developments in both Maryland v. Hegseth and the NADOHE constitutional challenge rulings on both the preliminary injunction, which is limited to the plaintiff states, and any vacatur of the FAR Council memorandum and agency class deviations, which would have governmentwide effect on the July 24, 2026, compliance deadline.

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

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

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Quick Hits

• An injury sustained during a soccer tournament organized by the employer is not a work-related accident.
• Coverage under statutory accident insurance may apply, in particular, if the event constitutes a company-sponsored social gathering.
• Events aimed exclusively at a specific group of people do not meet this requirement.
• Supporting activities, catering, or spectator attendance do not alter this classification.

The Case—Final Match With a Torn Cruciate Ligament

The employee’s (plaintiff’s) employer—a company with approximately 3,900 employees—organized a soccer tournament featuring preliminary rounds, a final, and an evening event. A maximum of approximately 1,500 people could participate in the preliminary rounds. On the day of the final, about 315 employees actively participated. The employee injured her left knee during the final match. Among other things, she was diagnosed with a torn cruciate ligament. The responsible workers’ compensation association refused to recognize the injury as a work-related accident. The employee’s lawsuit before the Hanover Social Court was unsuccessful.

The Decision—No Insurance Coverage for a Selective Sports Tournament

The court ruled that it was not a work-related accident under Section 8 of Book VII of the Social Code (Sozialgesetzbuch (SGB VII)). Playing soccer was not objectively related to the insured activity. While company-sponsored social events may be covered by insurance, SGB VII, Section 8 requires that they are in the company’s interest, sponsored by management, and designed for the participation of the entire workforce. This was lacking in this case, because the tournament format appealed from the outset only to a limited, athletically active portion of the workforce. The supporting program, spectator participation, and evening event were insufficient to make the event a company-sponsored social gathering.

Key Takeaways

The distinction between work-related and private accidents is a regular topic of discussion in the German courts. We have already published articles on this subject, including an incident of choking on coffee that was considered a workplace accident, and escaping an explosion while working remotely at home that did not qualify as a workplace accident. The ruling by the Hanover Social Court aligns with this line of reasoning: Sports-related corporate events must be legally assessed differently from traditional company parties. For employers, this means that the decisive factors are the concept, the objectives, and the actual opportunities for participation—not merely the role of the organizer or a supporting program.

The decisive factor is whether the event can be classified as a company social event within the meaning of SGB VII, Section 8. This requires a format that is objectively designed for the participation of the entire workforce, or at least the majority of it, and that promotes team spirit. Competitive sports tournaments with a selective group of participants generally do not meet these requirements. The presence of spectators, social elements, or an evening event do not alter the assessment as long as the core element remains a sporting competition.

Employers may therefore want to document the event’s purpose and target audience in the invitation and program. The following applies: The invitation must be addressed to the entire workforce or a defined segment of the workforce, and participation must be objectively possible for everyone. Open, inclusive formats with a mandatory communal program are more likely to qualify for insurance coverage than selective competitions. For sporting events, employers may want to offer an alternative program for employees who are not interested in sports. Events associated with particular risks—such as a hot-air balloon ride—are, however, difficult to classify as open, inclusive formats. It is easier to conduct a case-by-case review when the objectives, schedule, timing, location, and opportunities for participation are consistently aligned

Ogletree Deakins’ Berlin and Munich offices will continue to monitor developments and will post updates on the Cross-Border, Germany, Sports and Entertainment, and Workplace Safety and Health blogs as additional information becomes available.

Karl Melzer is an associate in the Berlin office of Ogletree Deakins.

Lela Salman, a law clerk in Ogletree Deakins’ Berlin office, contributed to this article.

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Quick Hits

• FIFA has introduced mandatory hydration breaks during all matches at the 2026 World Cup to prioritize player welfare amid hot and humid conditions.
• The hydration breaks may also serve as a reminder for U.S. employers of their legal obligations to prevent heat-related illnesses in outdoor workers, particularly as OSHA increases enforcement efforts.
• OSHA’s renewed emphasis on heat-hazard prevention suggests increased inspections into heat-related hazards in outdoor and indoor work environments, particularly during “heat priority days” or following heat-related injuries.

FIFA, the international governing body for the sport of soccer, has mandated that all 104 matches at the 2026 World Cup take a three-minute hydration break midway through each half to prioritize “player welfare.” But while FIFA has instituted hydration breaks in past tournaments, the 2026 World Cup marks the first time they are required at every match, regardless of weather conditions or whether the match is played in an indoor stadium.

Soccer fans and pundits are debating how these changes will impact play and strategy in matches, as matches have traditionally used a continuously running ninety-minute clock, split into two forty-five–minute halves, with no formal clock stoppages other than the halftime and full-time whistles. Regardless, the hydration breaks address a real risk to player safety in hot, humid summer conditions, which are likely to exist in many host cities across North America.

More broadly, the World Cup’s hydration breaks may serve as a reminder of such heat-related risks for all workers laboring outdoors, and U.S. employers’ legal obligations to address them—including providing hydration breaks on hot days—as the Occupational Safety and Health Administration (OSHA) ramps up enforcement of outdoor and indoor heat-hazard prevention obligations.

Heat-Related Risks

OSHA has warned that physical activity in high temperatures, humidity, and sun exposure, together with limited air movement, can increase the risk of heat-related illnesses, such as dehydration, heat exhaustion, and heat stroke. Those risks are increased for individuals who are pregnant or who have obesity or heart disease. Data from the U.S. Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) indicates that between 2021 and 2024, environmental heat exposure resulted in an average of forty-eight worker fatalities per year. However, these statistics likely do not capture the true magnitude and prevalence of heat-related injuries, illnesses, and fatalities.

Further, dangerous outdoor heat levels may be lower than some employers might expect. OSHA emphasizes that when the heat index reaches 80°F or higher, as measured by the National Weather Service (NWS), “serious occupational heat-related illnesses and injuries become more frequent.” Risks can be exacerbated by the type of labor with intense, strenuous work, such as lifting, carrying heavy loads, or digging.

Compliance Obligations and Shifting U.S. Regulations

In recent years, OSHA has increased its focus on the risks associated with heat exposure. OSHA has pursued rulemaking to establish a permanent federal standard for heat injury and illness prevention, most recently publishing a notice of proposed rulemaking in August 2024. While that rulemaking effort has stalled, OSHA has continued to emphasize employers’ obligations to prevent outdoor and indoor heat hazards under the General Duty Clause, Section 5(a)(1) of the Occupational Safety and Health (OSH) Act. Between calendar years 2022 and 2025, Federal OSHA conducted on average approximately 2,400 heat-related hazard inspections each year.

In April 2026, OSHA updated and renewed its National Emphasis Program (NEP) for outdoor and indoor heat-hazard prevention, replacing its expiring program with a new, aggressive directive that will be operative “for no more than five years” from its effective date (April 10, 2026) and will likely run until April 2031. The NEP notes that heat-related inspections accounted for 6 percent of all federal occupational safety and health inspections during the last five years, and targets fifty-five high-risk industries and worksites with heat-related hazards.

The NEP introduces the concept of “heat priority days,” which occur when the heat index is expected to reach 80°F or higher. On such days, area officers are directed to assess the potential for serious heat-related illnesses at both outdoor and indoor worksites. That means an inspector already present at an employer’s facility for an unrelated matter may expand the scope of that inspection if heat hazards are visible or alleged. Moreover, “programmed inspections shall occur on any day that the NWS has announced a heat warning or advisory for the local area.”

Employers that have previously been cited for heat-related violations face heightened scrutiny under the revised NEP. Initial follow-up inspections must be conducted for establishments cited following a heat-related fatality to verify that abatement has been implemented. Additional follow-up inspections are required for any establishment that received serious violations for heat-related hazards.

Key Takeaways

The NEP’s Appendix I provides a checklist that OSHA compliance safety and health officers (CSHOs) will use to evaluate employer heat programs during each inspection and that employers may want to note to help prevent and mitigate heat illnesses and injuries. The checklist’s areas of inquiry and emphasis suggest an approach for employers.

• Establish a written heat illness plan. The NEP states that inspectors will ask whether an employer has a written or verbal heat program and whether it has been effectively communicated to employees.
• Designate a heat safety representative. OSHA inspectors will specifically ask whether the heat program is “properly implemented and managed by a designated heat safety representative.”
• Implement water, rest, shade, and acclimatization measures. The NEP states that inspectors will examine whether “sufficient amounts of cool water [were] easily accessible” to workers, whether hydration and rest breaks were provided, whether shaded or cool areas were available, and whether workers were given periods to acclimate to the heat.
• Train staff. The NEP suggests that workers must be educated on recognizing and reporting the signs and symptoms of heat exhaustion and heat stroke, as well as on rendering basic first aid.
• Monitor conditions. The NEP indicates that inspectors will look at how an employer monitored ambient temperatures and levels of work exertion at the worksite.

Ogletree Deakins’ Workplace Safety and Health Practice Group will continue to monitor developments and will provide updates on the Sports and Entertainment and Workplace Safety and Health blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal covers heat illness prevention updates. It will soon feature new heat illness prevention templates that reflect Federal OSHA’s updated National Emphasis Program, available to Advanced and Premium subscribers on the Client Portal’s Federal Heat Illness Prevention and Wildfire Smoke Exposure page. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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Quick Hits

• A New Jersey appellate court ruled that employers may be able to claim privilege over certain law firm investigation documents from an investigation initiated prior to a lawsuit under New Jersey law.
• The court noted that timing of an investigation does not negate privilege if the investigation aims for legal advice or litigation preparation.
• The court stated that raising an affirmative defense may waive privilege over certain relevant documents, but trial courts must conduct a “line-by-line,” “page-by-page” assessment of withheld documents to determine whether information is so “tenuously related” to the affirmative defense that it should not be produced in discovery.

On June 1, 2026, the Superior Court of New Jersey, Appellate Division, in C.S. v. Brick Recycling Company, vacated a trial court’s ruling that none of several documents related to a workplace sexual harassment investigation that an employer-defendant had sought to shield were privileged, and sent the issue back to the trial court for reconsideration. While the court did not make any substantive rulings on whether certain investigation documents are privileged, the decision provided insight into the proper analysis of the issue under New Jersey law.

Background

The issue arises in a lawsuit filed by a former employee of a recycling company under the New Jersey Law Against Discrimination, alleging he was subjected to workplace sexual harassment by a coworker. Before the lawsuit, the company retained an outside law firm to conduct a formal investigation into the former employee’s complaints to the employer.

The employer raised several affirmative defenses, including that it had exercised reasonable care in responding to the harassment complaint. The employer produced the law firm’s final investigation report and nearly 600 other documents but withheld eight items—including notes of the attorney who conducted the investigation concerning meetings with the company’s owner, a draft investigation report, correspondence, and retainer-related materials—claiming attorney-client privilege and work-product protection. The trial court rejected the employer’s claim and ordered production of the documents. The employer’s leave for interlocutory appeal was granted.

Appellate Court’s Findings

The Appellate Division examined the trial court’s ruling following an in camera review of the documents under the Supreme Court of New Jersey’s 1997 “seminal” opinion in Payton v. New Jersey Turnpike Authority. Under Payton, the key question is the purpose of the investigation: if the attorney’s work was done to provide legal advice or prepare for litigation, privilege applies; if it was simply to enforce anti-harassment policy or comply with legal duties, it does not. 

Timing is not dispositive

The Appellate Division found that under Payton, the timing of a lawsuit is not dispositive. The appellate court said the trial court was apparently under the “mistaken impression” that privilege could not be invoked since the law firm started the investigation prior to the filing of the employee’s lawsuit.

“That timing, however, doesn’t mean that a lawsuit was not reasonably anticipated,” the appellate division stated. “… Here, there is a sufficiently close temporal nexus between the claims, the undertaking of the investigation, and the filing of the complaint to regard [the investigating attorney] as acting in a dual role as both investigator and legal adviser to the company.”

Trial court must consider the scope of waiver

The appellate court noted that Payton recognized that an employer has waived privilege when it seeks to rely on an investigation to assert an affirmative defense that it exercised reasonable care. But it said that the waiver is not absolute. Payton requires the trial court, during its in camera review, to consider whether certain documents created or identified in an investigation are “tenuously related” to the affirmative defense. That means “the trial court should be attentive to the potential relevance of the item in either direction: supporting the employer’s defense or weakening it,” the Appellate Division said.

Draft reports deserve heightened protection

The court questioned whether the investigating attorney’s draft investigation report should be disclosed at all, analogizing to the general nondiscoverability of expert draft reports. “At the time of trial, a litigant relies on the finalized version of the report to support a claim or an affirmative defense, not the draft,” the court noted. Although the court rendered “no definitive decision on the subject,” it directed the trial court to reconsider the issue.

Investigation notes are not categorically privileged

However, the court rejected the defendant’s request that it categorically block discovery of the investigation attorney’s meeting notes with the company’s owner. The appellate court found that such notes require “closer line-by-line scrutiny by the trial court” and that while pages consisting of legal advice may be redacted, “non-advisory passages that mention facts that may be relevant to the case” may be produced.

Key Takeaways for Employers

The Appellate Division’s ruling provides valuable insights into the issue of privilege under New Jersey law regarding workplace investigations conducted by outside law firms and the documents generated or identified as part of those investigations. These insights may affect employers’ strategies for responding to complaints, remediating problems, and limiting liability. The ruling raises some key considerations:

• Employers may want to consider engaging an outside law firm early, which may enable an employer to mitigate any alleged workplace harassment, and where a lawsuit is reasonably anticipated, materials from such investigations may be privileged.
• The ruling suggests that draft investigative reports may receive greater protection, meaning employers may want to consider keeping drafts separate and clearly identified as drafts.
• Employers may further want to consider that raising certain affirmative defenses to workplace harassment claims may result in a waiver of privilege under New Jersey law over documents sufficiently related to that defense.
• The decision to disclose or not is a strategic decision employers may want to consider, given the individual facts and circumstances. In this case, the employer voluntarily produced the investigation report and other documents, and the appellate court noted this cooperation.

Ogletree Deakins’ Morristown office and Workplace Investigations and Organizational Assessments Practice Group will continue to monitor developments and will provide updates on the Employment Law, New Jersey, and Workplace Investigations and Organizational Assessments blogs as additional information becomes available.

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Quick Hits

• A New Jersey appellate court reversed a trial court’s dismissal of five CEPA counts, finding the plaintiff’s retaliatory termination claim was timely because CEPA’s one-year statute of limitations runs from the date of actual discharge, not from prior retaliatory acts.
• The court held that, under the continuing violation doctrine, the plaintiff’s hostile work environment claim accrued within the limitations period because acts of retaliation occurring within the statute of limitations period “sweep in” earlier, nondiscrete acts.
• The court remanded to the trial court for further proceedings, including granting the plaintiff leave to amend her complaint to plead the series and chronology of nondiscrete acts with more specificity.

On May 7, 2026, the Superior Court of New Jersey, Appellate Division, in Ham v. Novartis International AG, reversed a trial court’s order dismissing with prejudice five CEPA counts against a pharmaceutical company and remanded for further proceedings. While the ruling addressed the timeliness of the plaintiff’s whistleblower retaliation claims, the decision provided important guidance on the application of CEPA’s one-year statute of limitations and the continuing violation doctrine.

Background

The case arose from a lawsuit filed by Cynthia Ham, an attorney who served as an ethics, risk, and compliance advisor for Novartis. Ham alleged she was retaliated against for raising concerns about three areas that she believed involved illegal discount arrangements, kickbacks, and patient steering.

Ham alleged she was subjected to retaliation that included being excluded from meetings and a public speaking engagement, subjected to bogus HR investigations, given a substandard performance evaluation, issued a “final warning” conduct memo, and ultimately discharged. She raised claims of retaliation and hostile work environment under CEPA, as well as retaliation, disability discrimination, failure to accommodate, and hostile work environment under the New Jersey Law Against Discrimination (NJLAD).

Novartis moved to dismiss the CEPA claims, contending the claims were barred by CEPA’s one-year statute of limitations. The parties had entered into a tolling agreement that paused the statute of limitations on August 8, 2022, and later ended on May 31, 2023. In January 2025, the trial court granted the motion in part, dismissing all five CEPA counts with prejudice. The trial judge ruled the alleged retaliatory acts were discrete acts that occurred more than one year before August 8, 2022, could not be aggregated under a continuing violations theory, and were therefore untimely. Ham’s motion for reconsideration was denied.

While the Appellate Division denied Ham’s motion for leave to appeal, she moved for leave to appeal to the New Jersey Supreme Court, which granted the motion and summarily remanded the case to the Appellate Division for consideration on the merits.

Appellate Court’s Findings

The Appellate Division reviewed the trial court’s ruling de novo, examining the legal sufficiency of the facts alleged on the face of the complaint and giving Ham the benefit of every reasonable inference.

The Appellate Division found that Ham’s CEPA claim alleging retaliatory termination was timely as a discrete retaliatory act. The court stated that “when the employer’s alleged conduct consists of wrongful termination, the employee’s cause of action under CEPA accrues on the date of actual discharge.” Because Ham was discharged on October 19, 2021, “squarely within the August 8, 2021, and August 8, 2022, limitations period” fixed by the tolling agreement, the claim was timely.

The court also held that, under the continuing violation doctrine, Ham’s CEPA hostile work environment claim accrued within the limitations period. Ham alleged a series of separate acts comprising a pattern of retaliatory conduct, including Novartis obstructing her return to work after her medical leave for cancer treatment and mishandling her return-to-work accommodations request in September 2021 and October 2021. The court found these last acts “sweep in otherwise untimely, prior non-discrete acts.”

The court explained that a hostile work environment claim consists of “many separate but relatively minor instances of behavior directed against an employee that may not be actionable individually but that combine to make up a pattern of retaliatory conduct.” Under this doctrine, a plaintiff may pursue a claim if each asserted act is part of a pattern, and at least one of those acts occurred within the statutory limitations period.

The court rejected Novartis’s contention that Ham’s hostile work environment claim failed because she did not plead “an unbroken pattern of retaliation.” The appellate court found “no such bright-line rule in New Jersey caselaw” and noted that “the federal cases upon which the defendants relied were not precedential ‘under [New Jersey’s] state employment-law jurisprudence.’”

Key Takeaways for Employers

The Appellate Division’s ruling provides important guidance on the timeliness of CEPA claims and the continuing violation doctrine. The ruling raises some key considerations:

• A retaliatory termination claim under CEPA accrues on the date of actual discharge, meaning the statute of limitations does not begin to run until the employee is actually discharged, regardless of prior retaliatory acts.
• A series of relatively minor retaliatory acts, such as exclusions from meetings, poor performance evaluations, and obstructing a return to work, can combine to form a hostile work environment claim under the continuing violation doctrine, even if individual acts occurred outside the statute of limitations period.
• Employers may wish to train supervisors on how to properly handle internal whistleblower complaints and carefully document the legitimate business reasons for any adverse employment actions taken after an employee has raised ethical or compliance concerns.
• This decision underscores the importance of considering a tolling agreement’s impact on the statute of limitations, as such agreements can extend the period within which a plaintiff’s claims remain viable.

Ogletree Deakins’ Morristown office and Whistleblower and Compliance Practice Group will continue to monitor developments and will provide updates on the Ethics/Whistleblower and New Jersey blogs as additional information becomes available.

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

Steven J. Luckner is a shareholder in Ogletree Deakins’ Morristown office.

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

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Quick Hits

• Hospitality employers routinely use pesticides and other chemicals at the workplace.
• Under the Occupational Safety and Health (OSH) Act, employers may be liable if they fail to address serious hazards at the workplace.  
• Employee training on chemical hazards can help to prevent injuries.

Many hotels, resorts, spas, and campgrounds use fertilizers, herbicides, or pesticides to beautify the property and eliminate weeds, insects, rodents, and plant diseases.

To ensure safety and effectiveness, pesticides and other chemicals have label requirements for proper use, handling, and application, including guidelines for temperature and humidity levels and length of time for re-entry following proper application. Appropriate personal protective equipment (PPE), such as googles, waterproof gloves, rubber boots, and respirators, should be worn based on the type of chemical being handled.

The Occupational Safety and Health (OSH) Act’s General Duty Clause (Section 5(a)(1)) requires employers to provide a workplace free from recognized hazards that are likely to cause death or serious physical harm. This rule applies to chemical hazards just as it does for other hazards in the workplace.

Proper employee training can help to prevent work-related injuries connected to pesticides and chemicals. Under the Occupational Safety and Health Administration’s (OSHA) Hazard Communication Standard, employers must provide hazard training before employees work with or handle any pesticide. This includes providing employees with a safety data sheet,which provides detailed information about a hazardous chemical, including health hazards, safe handling practices, and emergency response procedures.

Employers must report any work-related hospitalization, amputation, or loss of an eye to OSHA within twenty-four hours. They must report fatalities to OSHA within eight hours.

Many hospitality employers hire teenagers to work during the summer. However, some state laws impose age restrictions on who may apply or come into contact with pesticides and other chemicals at the workplace. State laws vary on the age limits and types of chemicals included. Other child labor laws may apply as well, depending on the state.

Under Environmental Protection Agency (EPA) rules, an employee generally must be at least eighteen years old to obtain certification for and legally apply restricted use pesticides, a category of pesticides that can only be bought and used by people who are certified to do so. Those rules would not apply to general use pesticides or unclassified pesticides. Some states have their own set of licensing protocols and regulations for purchasing, application, and use of these chemicals with specific application information regarding temperature, humidity, reentry restriction, and employee training.

Next Steps

Employers may wish to assess whether their employee safety training and safety protocols are consistently implemented by supervisors. They may wish to carefully track workplace injuries in order to proactively address hazards and better understand the source of workplace injuries, such as chemical exposure. Using locked cabinets or sheds can help to keep unauthorized employees from accessing pesticides or other chemicals.  

Public awareness about chemical exposure has increased significantly in the last decade. Employers can take steps to incorporate environmental strategy as an overarching piece of their larger corporate vision.

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

Kathryn N. Taylor is Of Counsel in Ogletree Deakins’ Oklahoma City 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

• Starting June 11, 2026, the fee for IDR disputes will be lowered from $115 to $15, making the process more accessible for smaller disputes but potentially increasing the system backlog.
• Health plans and insurers must register in a new IDR registry to help providers correctly identify payors, potentially reducing ineligible or misdirected disputes.
• The open negotiation period will be managed through the federal IDR portal using standardized forms, with a fifteen-business-day response window, aiming to reduce disputes that are ineligible for IDR.
• An IDR entity must determine dispute eligibility within five business days, and payment determinations must be made within thirty business days, with binding decisions based on submitted payment offers.

Recent research has found that many claims that wind up in the IDR arbitration system generate awards for providers that are several times higher than the in-network median amount paid, or qualifying payment amount (QPA) for the relevant service in the relevant market. Those amounts are growing, and providers are winning nearly 90 percent of those disputes, which involve either emergency room charges or, primarily, out-of-network specialists—such as anesthesiologists, radiologists, and doctors performing neurology and neuromuscular procedures—who provide services at in-network facilities.

The U.S. Departments of Health and Human Services, Labor, and the Treasury (the “Departments”), together with the Office of Personnel Management, indicate that the regulations, which update 2023 proposed rules, are designed to streamline communication between payors, providers, and the IDR entities that resolve arbitration disputes and to clarify timelines and processes. For instance, IDR disputes will have to be submitted through the existing federal IDR portal, and they must be submitted on standard forms developed by the Departments.

Though the final rules are generally effective August 3, 2026, many of the key changes will take effect only after the Departments issue further guidance in coming months or years.

Key Provisions of the New Final Regulations

Fee Reduction

The Departments cut the IDR fee starting on June 11, 2026, to $15 from $115, regardless of the amount in dispute or the dispute’s eligibility. This is potentially good and bad news for employers, as IDR may become viable for smaller disputes, but this could also add to the IDR system’s significant backlog.

IDR Registry

Group health plans and health insurers will have to register under a new IDR registry, and each will be assigned a registration number. The Departments believe the registry will help providers “accurately identify” payors, thereby “reducing the number of ineligible disputes initiated within the Federal IDR process and reducing the number of disputes incorrectly initiated against the wrong” payor.

Negotiation Notices

Under the final rule, the open negotiation period will be run through the existing IDR portal. A party would initiate the negotiation period by filing a written notice through the portal, and the other party would have fifteen business days to respond with specific information. Both parties must use standard forms developed by the Departments.

This could be a significant development as a common employer complaint is that many IDR awards involve disputes that were never eligible for IDR in the first place.

Initiating the IDR Process

If no agreement is reached during open negotiations, either party could initiate the IDR process by submitting a notice through the existing federal IDR portal within four business days after the open negotiation period ends. The other party then would have three business days to respond with its own notice, which is a new development.

IDR Eligibility Determinations

The final regulations also standardize the timeline for determining whether a dispute is eligible for IDR. Once an IDR entity is selected to resolve the dispute, it must determine whether the dispute is IDR-eligible within five business days.

Research suggests that IDR entities are making payment determinations on disputes that were never IDR-eligible to begin with. The Departments are encouraging parties to contest eligibility during open negotiation or via the notice of IDR initiation response to avoid situations where disputes are found ineligible only at a later time—which may result in parties paying fees they otherwise would not owe—and to minimize the backlog currently plaguing the system.

Payment Determinations

Not later than thirty business days after the date of final selection of the certified IDR entity (or thirty business days after items and services are determined eligible when extenuating circumstances apply), the parties must each submit a proposed payment amount. The IDR entity then selects the offer it determines best represents the value of the item or service at issue. The IDR entity must issue a written decision within thirty days of the date it is selected. The decision is binding on the parties.

Staying Informed

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

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Quick Hits

• Starting on July 1, 2026, B-1 and B-2 visitor visa applicants can pay a $750 fee to secure a consular interview appointment within ten business days at select U.S. embassies and consulates.
• The expedited option aims to help business and tourist travelers who need faster access to visa appointments due to short-notice travel needs.
• The State Department will announce participating consular posts before the program takes effect on July 1, 2026.

The New Program

Under a temporary final rule, applicants seeking B-1 business visitor and B-2 tourist visas will be able to pay a $750 fee to secure interview appointments within ten business days at participating U.S. consular posts. The service will initially operate only at select consulates and embassies, with the State Department planning to announce participating locations in the coming weeks.

For many travelers, the new option could provide greater flexibility when unexpected opportunities or personal circumstances arise. Business professionals may need to travel on short notice for meetings, conferences, contract negotiations, or client visits. Families may be looking to attend weddings, graduations, milestone celebrations, or reunions with relatives living in the United States. Tourists planning vacations, cruises, national park visits, or major cultural events may also benefit from a faster path to obtaining interviews.

The timing of the new program coincides with a period of heightened international travel demand. As FIFA World Cup 2026 (June 11, 2026–July 19, 2026) gets underway, bringing millions of visitors to North America, the United States is also preparing for a range of other large-scale events and travel opportunities that typically drive visa demand. International trade shows, industry conferences, university visits, cultural festivals, and holiday travel periods all contribute to increased demand for visitor visas.

The expedited interview option represents another step in the State Department’s efforts to manage visa processing and address backlogs that have affected travelers in many parts of the world since the pandemic.

At the same time, the State Department continues to pursue other measures aimed at reducing visa overstays and strengthening compliance. Last year, the State Department launched a pilot program requiring certain visitor visa applicants to post bonds of up to $15,000 before receiving visas. The program has since grown to fifty countries, most of them in Africa.

Next Steps

While the new, expedited appointment service will not eliminate standard visa processing requirements, it offers travelers who are willing to pay an additional fee a way to access interview appointments significantly sooner than they might otherwise find in some locations.

Additional details, including which consular posts will participate and how applicants can request expedited appointments, should emerge before the program takes effect on July 1, 2026.

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

To learn more about 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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