Court Blocks $100,000 H-1B Fee While Appeal Proceeds. On July 24, 2026, the U.S Court of Appeals for the First Circuit denied the Trump administration’s request to stay, pending appeal, a June 8, 2026, decision by the U.S. District Court for the District of Massachusetts that struck down President Donald Trump’s September 2025 $100,000 H-1B proclamation. The court of appeals denied the stay request, finding that the administration had failed to make a strong showing of a likelihood of success on the merits of the appeal. Like the district court, the court of appeals determined that the presidential proclamation and its implementing materials exceeded the authority granted to the executive branch by Congress, as no provision of the Immigration and Nationality Act “references the imposition of the kind of payment requirement at issue.” Accordingly, the federal government is prohibited from collecting the $100,000 fee while the administration’s merits appeal continues. Katherine C. MacIlwaine, Nicole Fink, and Kara Goray have the details.

Senate Committee Approves Sonderling for Permanent Labor Secretary Role. On July 30, 2026, the U.S. Senate Committee on Health, Education, Labor and Pensions advanced the nomination of Keith Sonderling to be Secretary of Labor. Sonderling continues to serve as the acting secretary of labor, a role he assumed in April 2026 upon the resignation of former Labor Secretary Lori Chavez-DeRemer. Sonderling is an attorney who previously served as a Commissioner on the U.S. Equal Employment Opportunity Commission and in the U.S. Department of Labor’s Wage and Hour Division. Sonderling’s understanding of the current policy issues facing employers has earned him the support of the business community.

Senate Tees Up Vote on NLRB Nominees. National Labor Relations Board (NLRB) nominees James Macy and David Prouty are moving closer to Senate confirmation. This week, Senate Majority Leader John Thune (R-SD) included Macy’s and Prouty’s nominations in a package of seventy-four nominations scheduled to be voted on “en bloc” by the U.S. Senate during the legislative week beginning August 3, 2026. Because executive branch nominations require confirmation by a majority vote, not the sixty-vote threshold required for most legislation, the package of nominations is expected to be approved.

NLRB Drops Challenge to New York State Law’s Tenuous Jurisdictional Mantle. This week, the NLRB withdrew its lawsuit challenging a New York law that had granted the state’s Public Employment Relations Board jurisdiction over private-sector labor matters. The law was enacted as a local response to the NLRB’s lack of a quorum that had persisted for much of 2025. This week’s action—a stipulated dismissal agreed to by all parties–comes after a different federal court in New York permanently enjoined the state from enforcing the law, which was preempted by the National Labor Relations Act. NLRB General Counsel Crystal Carey stated in a press release on July 27, 2026, that “attempts to override NLRB jurisdiction through state law are clearly preempted by federal labor law.”

TPS Fallout Continues. Regulators and lawmakers continue to respond to the Supreme Court of the United States’ recent decision in Mullin v. Doe, in which the Court ruled that the Trump administration’s decisions to terminate temporary protected status (TPS) designations were unreviewable by the courts as to non-constitutional claims. Here is the latest:

• Work Authorization Expiration. U.S. Citizenship and Immigration Services (USCIS) has been issuing updates on TPS employment authorization expiration dates. This week, work authorization through TPS expired for individuals from Haiti and Syria. Work authorization is scheduled to expire for individuals under TPS designation for Somalia and Burma (Myanmar) on August 3, 2026, and for South Sudan and Ethiopia on August 6, 2026. These dates are subject to change, so impacted employers and workers should continue to monitor USCIS for further updates.
• Legislative Activity. Congresswoman Sylvia R. Garcia (D-TX) has introduced a discharge petition to force a floor vote on the American Dream and Promise Act of 2025 (H.R. 1589) in the U.S. House of Representatives. Among other provisions, the American Dream and Promise Act would allow beneficiaries of TPS to apply for lawful permanent resident status under certain conditions. Two hundred-eighteen signatures are needed to force a vote on the bill, and 210 representatives—including two Republicans—have signed the discharge petition. A previous version of the American Dream and Promise Act passed the House in March 2021.

SCOTUS Rules on Enemy Combatants. Eighty-four years ago today, the Supreme Court issued its decision in Ex Parte Quirin, a landmark ruling concerning the use of military tribunals to prosecute enemy combatants. The World War II–era case concerned eight German men (two of whom were U.S. citizens)—military intelligence agents—who were transported by German submarines to beaches in New York (specifically, Amagansett Beach, Long Island) and Florida (Ponte Vedra Beach).

Upon making their clandestine landings and coming ashore, the men discarded their German military uniforms and changed into civilian clothes. Their mission was to sabotage U.S. military manufacturing facilities. Captured before they could carry out their plans, the men were tried before a seven-member military tribunal established by President Franklin D. Roosevelt. During the trial, the Germans’ appointed counsel argued that the men should instead be tried in the civilian court system. This argument went all the way to the Supreme Court, which ruled unanimously that the military tribunal was constitutional. Chief Justice Harlan Stone wrote:

[O]ur Government has likewise recognized that those who during time of war pass surreptitiously from enemy territory into our own, discarding their uniforms upon entry, for the commission of hostile acts involving destruction of life or property, have the status of unlawful combatants punishable as such by military commission.

The tribunal continued, and all eight men were found guilty and sentenced to death, though FDR commuted the sentences to time in prison for two of the conspirators who cooperated in the investigation. Ex Parte Quirin went on to play a prominent role in the underlying legal theory behind the post-9/11 enemy combatant terrorist cases.

Quick Hits

• The DOL has proposed a rule that would add an additional electronic disclosure safe harbor modeled on the 2020 “notice and access” safe harbor for pension benefit plans.
• The proposed rule would apply to “group health plans” and would affect approximately 2.7 million ERISA-covered group health plans—but not other welfare benefit plans—covering about 134 million participants.
• The safe harbor would provide a clearer compliance path, but electronic delivery may not be a complete defense, if, for example, there are notice defects or undeliverable emails.

That safe harbor, along with estimates of employer savings of up to $3.9 billion over the next decade, was published in the Federal Register on July 23, 2026. If finalized as proposed, the earliest the rule could become effective is January 1, 2027. Plan sponsors can use the period before any final rule takes effect to align vendor contracts, notice inventories, and recordkeeping practices with the proposed safe harbor and potential litigation defenses.

Background

Current DOL rules established in 2002 generally allow electronic delivery of Employee Retirement Income Security Act (ERISA) disclosures only to participants who are “wired at work” (i.e., who have access to the employer’s electronic information system as an integral part of their duties) or who provide affirmative consent. As a result, plans may need to make individualized eligibility determinations and deliver paper to more participants. In 2020, the DOL finalized a default “notice and access” safe harbor for retirement plans, allowing plan administrators to post pension benefit plan documents online and notify participants by email, without requiring prior consent. The 2026 proposed safe harbor would extend that model to group health plans, modified for health plan privacy concerns.

Covered Individuals and Covered Documents

The safe harbor would be available to provide notice to “covered individuals”—participants, beneficiaries, and other individuals entitled to health plan documents who provide an electronic address (email or mobile number) to the employer, plan sponsor, or administrator, or who have been assigned one by the employer for employment purposes. Adult dependent children could also receive documents electronically if they have provided an electronic address.

“Covered documents” would encompass any document or information the administrator must furnish under Title I of ERISA, including documents that need only be furnished upon request (e.g., under ERISA section 104(b)(4)). This is broader than the 2020 pension safe harbor, which excludes upon-request documents. The proposal could apply to many recurring health plan disclosures, including SPDs, summaries of material modifications (SMMs), COBRA notices, and claims notices.

No Direct Email Delivery

Unlike the 2020 retirement plan safe harbor, the proposed group health plan rule would not permit direct email delivery of covered documents. EBSA cited privacy concerns regarding protected health information (PHI) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Instead, group health plan administrators would be required to maintain a website where documents can be accessed and would have to furnish a notice of internet availability (NOIA) alerting covered individuals when documents are posted.

Notice of Internet Availability (NOIA)

The proposed rule would require the administrator to furnish a NOIA each time a covered document is posted to the website (or, for combined annual notices, once per plan year, no more than fourteen months after the prior notice). Each notice would be required to include all of the following:

• A prominent statement: “Disclosure About Your Health Plan”
• A statement that important information about the health plan is now available for review
• Identification of the covered document by name
• The website address or hyperlink where the document can be accessed
• A statement of the right to request a free paper copy and instructions for doing so
• A statement of the right to opt out of electronic delivery entirely, free of charge, and how to exercise that right
• A caution that the document need not remain posted for more than one year (or until superseded)
• A telephone number for the plan administrator

Plans generally would send a separate notice when a covered document is posted, although the proposal would allow certain annual or enrollment-related disclosures to be addressed through a combined annual NOIA. Like other participant notices, this would need to be written so that the average plan participant can understand it.

Website Standards

The proposed safe harbor would also impose specific website standards. Covered documents would have to be posted no later than the date otherwise required for furnishing under ERISA, remain available for at least one year (or until superseded), be presented in a manner understandable to the average participant, and be in a widely available format suitable for online reading and printing (e.g., PDF). Documents would also have to be electronically searchable and permanently retainable or downloadable. The administrator would be required to take measures to protect the confidentiality of personal information on the site.

Paper Notice Requirements

Before relying on the new safe harbor, administrators generally would be required to furnish a paper initial notice describing that documents will be delivered electronically, identifying the electronic address to be used, providing access instructions, and reiterating paper-copy and opt-out rights. Specifically, covered individuals would retain the right to request a free paper copy of any covered document at any time. They may globally opt out of electronic delivery entirely, free of charge.

What to Consider Now

The rule is only proposed, but plan sponsors and administrators may want to begin evaluating whether their current disclosure practices would qualify for the new safe harbor if it is finalized. For example:

• when entering into new agreements or amendments with health plan service providers, ensuring that the agreements allow for the use of any new safe harbor disclosure method once finalized;
• inventorying required group health plan disclosures and current delivery methods;
• confirming which participant populations have valid employer-assigned or provided electronic addresses;
• reviewing benefits portals, vendor websites, and mobile applications for access, search, print, retention, and privacy functionality;
• developing procedures for paper-copy requests, opt-outs, undeliverable notices, and post-employment address updates;
• confirming that vendors can maintain records of delivery, bounces, opt-outs, paper requests, and document availability; and
• considering enhanced communications or acknowledgments for high-risk notices, including wellness or tobacco surcharge disclosures.

Although the safe harbor would be voluntary, failure to satisfy its conditions could leave sponsors to defend whether their disclosure practices were otherwise reasonably calculated to reach participants.

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.

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Quick Hits

• The D.C. Circuit’s July 2026 ruling in Trustees of the IAM National Pension Fund v. M&K Employee Solutions affirmed most of an $11.4 million withdrawal liability judgment against affiliated employee-leasing entities while reversing a $1.6 million delinquent contributions judgment because the pension fund failed to establish the full four-factor single-employer test beyond common ownership.
• Business owners participating in multiemployer pension plans face potential personal liability under the MPPAA’s controlled group provisions, though courts may exclude casual investment activity from the definition of a qualifying “trade or business,” and successor entities acquiring withdrawing employers’ operations may inherit withdrawal liability regardless of corporate restructuring.
• Employers withdrawing from multiemployer pension plans may want to carefully document applicable interest rates at the time of withdrawal, seek express written agreements on how partial payments will be allocated, and maintain genuine operational separateness among affiliated entities to reduce overall liability exposure and defend against single-employer claims.

Background

M&K Truck Centers operates twenty-eight truck dealerships through affiliated companies, each structured with a “Sales” entity to run the dealership and a separate “Employee Solutions” (ES) entity to hire workers and lease them back to the sales company. Three ES entities signed collective-bargaining agreements requiring contributions to the IAM National Pension Fund. When ES Alsip withdrew from the IAM National Pension Fund at the end of 2018, the pension fund assessed approximately $6.1 million in withdrawal liability. ES Alsip disputed the assessment and, contrary to the MPPAA’s “pay first, dispute later” rule, failed to make interim payments, prompting the IAM National Pension Fund to accelerate the payment schedule and sue. The pension fund also claimed that ES Summit owed approximately $1.6 million in delinquent contributions for work performed at a separate Northern Illinois dealership. The district court granted summary judgment for the pension fund on all claims and entered a $13 million judgment—comprising $11.4 million arising from ES Alsip’s withdrawal liability (including accrued interest and liquidated damages) and $1.6 million for ES Summit’s delinquent contributions. The court held multiple affiliated entities and individuals jointly and severally liable. On appeal, the D.C. Circuit affirmed in part and reversed in part, upholding the ES Alsip withdrawal liability but reversing the $1.6 million judgment against ES Summit.

(This matter is unrelated to the recent Supreme Court of the United States decision in M&K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, holding that, under ERISA, an actuary for an underfunded multiemployer pension plan may calculate an employer’s withdrawal liability based on actuarial assumptions adopted after the relevant measurement date for withdrawal liability.)

Key Takeaways

Personal Liability for Owners Hinges on ‘Trade or Business’ Analysis

Business owners and individuals with ownership interests in companies that participate in multiemployer pension plans may face potential personal liability. Under MPPAA’s control-group provisions, individuals engaged in a “trade or business” under common control with the withdrawing employer may be held personally liable for withdrawal liability. However, this case offers some reassurance: the court found that casual investment activity, such as occasional house-flipping treated on tax returns as personal transactions, may not constitute a “trade or business” sufficient to trigger personal liability. Owners may want to carefully document the nature of their outside business activities, and maintain a clear separation between personal investments and trade or business activities before withdrawal to assess personal liability exposure.

Controlled Group Liability Applies Automatically to Commonly Controlled Entities

For withdrawal liability, the MPPAA’s controlled group rule under 29 U.S.C. § 1301(b)(1) automatically treats all commonly controlled trades or businesses as a single employer. Common control (determined based upon level of ownership and/or voting interests for corporations) alone is sufficient. The pension fund need not prove interrelated operations, common management, or centralized control of labor relations. In this case, the court confirmed that the ES entities were commonly controlled and thus jointly and severally liable for ES Alsip’s withdrawal liability. The court also found “overwhelming evidence” that each employee-leasing entity was a single employer with its corresponding operating company, resulting in joint liability for pension obligations.

Successor Liability May Attach to Acquiring Entities

Successor companies that acquire operations from a withdrawing employer may inherit the withdrawing employer’s withdrawal liability. The court imposed vicarious liability on Laborforce, LLC, and Employee Services, Inc. (ESI) as successors to the ES entities. Employers considering acquisitions, reorganizations, or new corporate structures may want to conduct thorough due diligence on potential pension liabilities and structure transactions to minimize exposure to unintended liability.

Structuring Relationships With Unrelated Affiliated Entities

Employers using unrelated affiliated entities, such as staffing companies or employee-leasing arrangements, will want to consider how courts assess whether to treat separate entities as a “single employer” for pension purposes. For delinquent contribution claims (as opposed to withdrawal liability), some courts apply the National Labor Relations Board (NLRB) four-factor test, which considers interrelated operations, common management, centralized control of labor relations, and common ownership. Here, the appellate court reversed a $1.6 million judgment for delinquent contributions on summary judgment because the IAM National Pension Fund’s complaint alleged only common ownership between ES Summit and ES Northern Illinois, without demonstrating the other three factors. An employer may defend against single-employer claims by maintaining genuine operational separateness, separate management, distinct labor relations practices, and independent day-to-day operations. Conversely, courts will look beyond corporate formalities to the substance of the relationship.

Withdrawal Liability Interest Rates May Be Locked at Termination

This case provides employers withdrawing from a multiemployer pension plan an argument against increased interest rates imposed after the withdrawal. The court held that when an employer terminates its collective-bargaining agreement and withdraws from the fund, subsequent trust amendments raising interest rates cannot be applied to that employer’s withdrawal liability unless the original agreement expressly authorized such changes. This ruling benefits employers by providing potential certainty around withdrawal costs: once an employer withdraws, the financial terms in effect at that time may govern. Employers contemplating withdrawal may want to carefully document the applicable interest rate provisions and be prepared to challenge any retroactive increases.

Application of Partial Payments

Employers making partial payments on withdrawal liability may want to note that, absent an explicit agreement otherwise, a pension fund will typically apply those payments first to accrued interest rather than to the principal balance. This approach, known as the “United States Rule,” can significantly increase the total amount an employer ultimately pays. Employers negotiating payment terms with a pension fund may want to seek express written agreements specifying how payments will be allocated. A clear allocation agreement, applying payments to principal first or on a pro-rata basis, can reduce overall interest costs and provide greater certainty in financial planning.

Bottom Line for Employers

This decision reinforces several critical practices for employers to consider prior to withdrawing from a multiemployer pension plan. Because the structure of business operations can significantly impact how withdrawal liability is assessed and collected, individual owners can carefully evaluate whether their outside activities could be characterized as a “trade or business” that would expose them to personal liability under the controlled group rules. Employers considering acquisitions or business reorganizations can conduct thorough pension liability due diligence with a clear understanding of how the withdrawal liability rules operate and successor liability risks. Employers using unrelated affiliated entities can maintain genuine operational separateness to defend against single-employer claims. Prior to withdrawal, an employer can document applicable interest rates and be prepared to challenge any retroactive increases. When negotiating partial payment terms, employers can seek express agreements with the multiemployer pension fund specifying how payments will be applied to minimize total costs.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group and ERISA Litigation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation and Traditional Labor Relations blogs as additional information becomes available.

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Quick Hits

• A claim for damages based on termination-related fault may arise only if the employer’s serious breach of contract would have justified extraordinary termination without notice.
• An employer may be liable for misconduct among coworkers only if the employee acted as the employer’s vicarious agent, for example as a supervisor with authority to issue instructions, or if the conduct had a close factual connection to assigned job duties.
• Furthermore, the misconduct must have actually been the cause of the employee’s decision to resign.
• An employee’s extraordinary termination without notice must be received by the employer within two weeks after the employee becomes aware of the facts relevant to the termination.

The Case

The employee had been working shifts at a nursing home since 1987, most recently in the laundry department. In the summer of 2022, she and a coworker discovered a listening device there that had been hidden by a third coworker (Ms. B). Ms. B admitted to the incident and received a written warning. The employer changed the shift schedule in the laundry department so that the colleagues would no longer work together. In addition, the employer introduced a handover log for shift changes to prevent direct contact between the two. As a further measure, the employer commissioned an external mediator to resolve the conflict. However, the mediator’s attempt at mediation failed. As a result, the employee became permanently unable to work and, on March 11, 2024, resigned with immediate effect on grounds attributable to the employer, citing a medical certificate. On February 27, 2024, the plaintiff’s family physician certified that she suffered from a chronic adjustment disorder resulting from a workplace conflict, which prevented her from continuing to work for her employer. Subsequently, the plaintiff demanded approximately EUR 20,800 in damages and EUR 5,000 in compensation for pain and suffering from the employer. The Stralsund Labor Court dismissed the claim at first instance.

No Termination-Related Fault in Light of Adequate Crisis Management

The LAG upheld the dismissal of the complaint in its entirety. A claim for damages (pursuant to Section 628(2) of the German Civil Code (Bürgerliches Gesetzbuch (BGB)) requires misconduct on the part of the employer that would have justified an extraordinary termination without notice. This was lacking in the present case. The secret eavesdropping by the coworker could not be attributed to the employer. The coworker neither had authority to issue instructions to the plaintiff nor acted in connection with her job duties. Furthermore, the court found that the employer’s crisis management measures—separating shifts, maintaining a handover log, and engaging an external mediator—were sufficient to satisfy the employer’s duty of care toward its employees, even if the mediation ultimately proved unsuccessful. The court also clarified that the employer was not obligated to discharge the colleague who had eavesdropped: In principle, it is up to the employer to decide how to respond to conflicts, as long as the measures chosen are appropriate for resolving the conflict. In this case, the employer could reasonably assume this to be the case. Since the employer could not therefore be accused of any misconduct of its own, the claim for compensation for pain and suffering due to the mental illness was also unsuccessful.

Takeaways

Employers are obligated to protect their employees from health hazards (including psychological ones), bullying, discrimination, and other violations of personal rights. However, a claim for damages does not arise from every conflict among colleagues. In particular, employers are not directly liable for the conduct of employees who commit legal violations against other employees that are unrelated to business operations and outside their assigned duties. Rather, what is decisive is how an employer responds to breaches of duty that come to its attention. In practice, liability risks usually arise from an inadequate or delayed response.

The LAG’s decision illustrates that employer liability for coworker misconduct depends on attribution of the misconduct or on the employer’s own response after learning of the incident. In this case, the court considered the employer’s measures—shift separation, a handover log, and mediation—sufficient, and it did not require discharging the coworker who had secretly monitored the plaintiff.

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

Daniela Schumann is a senior associate in the Berlin office of Ogletree Deakins.

Maximilian Gössling, a trainee lawyer in the Berlin office of Ogletree Deakins, contributed to this article.

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Quick Hits

• Near-daily comments of a humiliating nature can satisfy the “severe or pervasive” standard for harassment.
• Second-hand harassment directed at a coworker of the same protected class can contribute to a plaintiff’s hostile work environment claim.
• Employers may want to ensure their investigations into harassment allegations are thorough and follow established procedures; missing files, uninterviewed witnesses, and testimony discrepancies can raise genuine disputes of material fact about the adequacy of an employer’s response.

Factual Background

The employee, a Black woman and naturalized U.S. citizen born in Ghana, worked as a registered nurse at the hospital. She was subject to a ninety-day probationary period after hire. The employee alleged that, almost from the beginning of her employment, Hispanic nurses in her unit discriminated against her and another Black nurse, including mocking African food and accents, making unflattering comments about Black employees, and expressing preferences for Filipino workers. The harassment allegedly occurred on nearly every shift.

The employee reported the conduct to her supervisors, who conducted an investigation she considered unsatisfactory. When her supervisors offered her a transfer to a different department, she declined. After her continued complaints, her supervisors allegedly retaliated by issuing informal “coachings,” formal disciplinary actions, and extending her probationary period, citing time management and patient care issues.

The employee was subsequently involved in a car accident. After an extended medical leave, the employee engaged in back-and-forth communications with the hospital about returning to work. After a delay in the hospital’s response, she mailed a letter advising of her “forced resignation,” citing discrimination, harassment, and retaliation.

The employee subsequently filed suit, asserting various claims, including hostile work environment harassment based on race under Title VII and Section 1981. The federal district court granted summary judgment for the hospital on all claims, and this appeal followed.

Legal Framework

To establish a hostile work environment claim under Title VII and Section 1981, a plaintiff must show that (1) she belongs to a protected group; (2) she was subjected to unwelcome harassment; (3) the harassment was based on her membership in a protected group; (4) the harassment affected a term, condition, or privilege of employment; and (5) the employer knew or should have known of the harassment and failed to take prompt remedial action.

The harassment must be “sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment.” Courts evaluate the totality of the circumstances, including the frequency of the conduct, its severity, whether it is physically threatening or humiliating versus merely offensive, and whether it unreasonably interferes with work performance.

To avoid liability, the employer’s response must be “reasonably calculated to end the harassment.” Prompt remedial action requires more than going through the motions of an investigation. Rather, the employer must demonstrate that its response was adequate to protect the complainant.

The Court’s Analysis

The Fifth Circuit reversed the district court’s grant of summary judgment on the hostile work environment claims, finding that genuine disputes of material fact existed regarding both the severity of the harassment and the adequacy of the employer’s response. In so finding, the court made the following key points:

Frequency of the harassment supported a finding of pervasiveness. The employee testified that the discriminatory comments occurred on almost every shift. The court noted that this frequency, combined with the cumulative effect of the conduct, would be sufficient for a reasonable jury to find that the harassment was pervasive enough to alter the conditions of employment.

The comments were potentially humiliating, not merely offensive. Mocking a person’s food, accent, and racial characteristics in a professional workplace could be humiliating.

Second-hand harassment was relevant. The court also relied on testimony from another Black nurse who experienced similar harassment from the same group of coworkers. This second-hand evidence contributed to the hostile work environment analysis because it demonstrated a broader pattern of discriminatory behavior in the unit.

The employer’s investigation raised genuine disputes about adequacy. The court identified multiple red flags in the hospital’s investigation: discrepancies in testimony about who was interviewed, missing investigation files and notes despite testimony that such a file existed, failure to interview at least one Black employee who could corroborate the complaints, exclusion of corroborating statements from the investigation summary, departure from usual investigative practices, and a supervisor’s admission that “cliques were not going anywhere.” These gaps, viewed in the light most favorable to the employee, created a triable issue about whether the employer took prompt remedial action reasonably calculated to end the harassment.

Lessons for Employers

This decision offers valuable guidance for employers facing harassment complaints:

• Maintaining complete investigation records. The court highlighted the absence of an investigation file as a significant problem for the hospital. Employers may wish to create and retain written records of every step in a harassment investigation, including witness interview notes, findings, and remedial measures taken. A complete paper trail may be essential for demonstrating that the employer’s response was adequate.
• Interviewing all relevant witnesses, especially those who can corroborate. Employers may want to ensure that investigators speak to all employees who may have relevant information, including those who share the complainant’s protected characteristics and could confirm or deny the alleged conduct. Skipping potential corroborating witnesses can undermine the credibility of an investigation.
• Following established investigation procedures consistently. The court noted departures from the hospital’s usual investigative practices as evidence of an inadequate response. Employers may wish to develop clear, written investigation protocols and apply them uniformly to every complaint.

Ogletree Deakins’ Workplace Violence Prevention Practice Group will continue to monitor developments and will provide updates on the Employment Law, Healthcare, State Developments, and Workplace Violence Prevention blogs as additional information becomes available.

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Quick Hits

• The New Jersey Supreme Court ruled that the 2023 Opposition Amendment, which permitted the state attorney general to more easily effectuate NJFCA lawsuits based on public disclosures, applied retroactively to pending cases.
• The court held that the Opposition Amendment was a procedural change that applied retroactively because it altered only how the state attorney general could overcome the NJFCA’s “public disclosure bar” (a doctrine that precludes actions by private persons based on publicly disclosed “allegations or transactions”) without affecting the defendants’ conduct.
• The decision revived a qui tam relator’s lawsuit regarding interest rates set by financial firms, highlighting an expanded capability for relators to bring claims even with secondhand information.

In a precedential ruling, the New Jersey Supreme Court held that the Opposition Amendment applied retroactively to a pending NJFCA case because it “did not alter any vested rights of the parties or the substance or scope of the NJFCA.” The amendment altered only the procedure by which the state’s attorney general could oppose dismissal of qui tam relator lawsuits that would otherwise have been blocked by the public disclosure bar, the court found.  

The ruling revived a qui tam relator’s lawsuit originally filed eight years before the 2023 NJFCA Opposition Amendment, challenging the setting of interest rates on government bonds by private financial institutions contracted as remarketing agents.

The Public Disclosure Bar and the 2023 Opposition Amendment

Until 2023, the NJFCA had barred relators who were not the original source of the information underlying their claims from bringing suits based on publicly disclosed allegations or transactions—a doctrine known as the “public disclosure bar.” The bar operated as an affirmative defense that defendants could raise to block NJFCA suits.

However, in 2023, the New Jersey Legislature amended the NJFCA to permit New Jersey’s attorney general to file a notice of opposition to the application of the public disclosure bar without needing to intervene in and take over a relator-initiated lawsuit. The legislature specified that the amendment was to “take effect immediately.”

The Opposition Amendment Is Procedural

The New Jersey Supreme Court distinguished between substantive and procedural statutes, finding that courts have “consistently held” that procedural statutes apply to all proceedings, including both pending proceedings and proceedings related to claims not yet filed. Citing the Supreme Court of the United States’ 1994 holding in Landgraf v. USI Film Products, the New Jersey high court stated that “remedial and procedural statutes can have retroactive effect” because they do not retroactively change a party’s substantive rights. They “do not impair rights a party possessed when [the party] acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.”

The 2023 Opposition Amendment was procedural, the court held, because it merely changed the mechanism by which the attorney general could prevent application of the public disclosure bar, requiring only the filing of a simple notice of opposition instead of full intervention. The court noted that the amendment “had no impact on defendants’ alleged underlying conduct and affected only a procedural aspect of the NJFCA,” “did not alter liability for past conduct”; did not “change any defined terms of the statute or requirements for filing a complaint,” and “did not alter any vested rights of the parties or the substance or scope of the NJFCA.”

The Amendment Applies to Pending Cases

The defendants pointed out that, as part of the 2023 amendments to the NJFCA, the legislature amended the definition of an “original source” of information capable of serving as the basis for an underlying NJFCA suit. They argued that since the New Jersey Appellate Division had previously held that the new definition of “original source” did not apply retroactively, courts must apply the pre-amended version of NJFCA to all suits filed prior to the Opposition Amendment’s effective date. Either way, they argued, the Opposition Amendment was actually substantive.

Rejecting this argument, the New Jersey high court stated that “in assessing multiple amendments to a statute, courts must examine each provision separately and should not assume that different provisions were intended to have the same applicability to pending cases.” The “original source” amendment was substantive, the court held, because it lowered the evidentiary standard for NJFCA suits, allowing more suits by relators with secondhand information.

The same could not be said for the Opposition Amendment, the court wrote, which “did not change any defined terms, substantive elements, or attach any new rights or legal consequences to pre-amendment conduct.” The attorney general “always had the ability” to oppose the public disclosure bar, meaning that the parties could not reasonably have expected at the time of the alleged conduct or during the litigation that public disclosure would completely bar NJFCA claims.

Key Takeaways

The New Jersey Supreme Court’s ruling potentially increases businesses’ exposure to qui tam lawsuits. The decision indicates that the public disclosure bar is a less reliable defense against NJFCA liability, as the attorney general now needs only to file a notice of opposition rather than intervene in a false claims suit. This reduces the burden on the State of New Jersey for keeping qui tam actions alive.

Moreover, the case sets a precedent in New Jersey that amendments to state law amending the procedural rights of parties may be applied retroactively to litigation pending at the time of the amendments’ effective dates. That means businesses involved in long-running litigation may need to be aware of mid-case legislative changes that could alter the landscape of their pending cases.

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

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Quick Hits

• The ArbG Berlin found that a nonbinary person’s employment application was not genuinely aimed at obtaining the position and therefore dismissed the subsequent compensation claim as an abuse of rights.
• Whether a disadvantage had occurred remained open because the court dismissed the claim on the basis of abuse of rights.
• Protection of nonbinary persons against discrimination remains unaffected.

The Case—Binary Job Posting and Rejection With an Incorrect Salutation

The claimant’s registered gender marker is “diverse,” and they applied for a position as a “Consultant for Procurement Law and Public Procurement.” During the application process, the claimant asked to be addressed in a gender-neutral way. The employer rejected the application by email in February 2026 and addressed the claimant as “Mr.” The claimant based the claim for compensation under the AGG on two alleged indications of discrimination: the purely binary wording of the job posting and the incorrect salutation in the rejection.

The Decision—No Claim Due to an Abusive Application

The court dismissed the claim without ultimately deciding whether a disadvantage had occurred. IThe court dismissed the claim without ultimately deciding whether a disadvantage had occurred. Instead, the ArbG held that the compensation claim was abusive because, in the court’s view, the application was not intended to obtain the position but solely to create a claim for compensation. The Berlin Labor Court cited several circumstances that weighed against a genuine interest in the position:

• the close timing between the rejection and the pursuit of the claim;
• a lack of expertise in procurement law, which was required for the position; and
• simultaneous enrollment at two universities.

On balance, the court found that the indications against a genuine interest in the position outweighed any indications of genuine interest. The claimant may file an appeal with the Regional Labor Court (Landesarbeitsgericht) Berlin-Brandenburg and, according to media reports, has already announced plans to do so.

Takeaways—Take Discrimination Protection Seriously, Limit the Risk of Abuse

Discrimination protection naturally applies in the application process as well. Employers may want to draft job postings in gender-sensitive terms, and the addition “(m/f/d)” or “(m/f/x)” is essential here. They may also want to design their procedures to be free from discrimination and to take care, when addressing applicants, to correctly reflect each applicant’s sex or gender identity.

The court nevertheless drew a clear line where, in its assessment, an application is not aimed at employment but solely at obtaining compensation. According to the court, a systematic assertion of claims aimed only at compensation can constitute an abuse of rights and fail for that reason alone.

The ruling leaves protection for nonbinary persons and other affected applicants intact, while rejecting claims that the court views as abusive.

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

Julia Kulmegies is an associate in Ogletree Deakins’ Berlin office

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

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Quick Hits

• The Texas Department of Public Safety published a proposed amendment to its identity-document rule (37 TAC §15.24) on June 11, 2026, to align Texas with the federal REAL ID Act of 2005.
• Texas currently accepts a foreign passport with a U.S. visa—valid or expired—together with a qualifying Form I-94.
• Under REAL ID alignment, the applicant would be required to present a valid, unexpired visa, so an expired visa stamp would no longer satisfy this requirement even when the person remains in valid status.
• If the Texas proposal is adopted, affected workers may need to present an unexpired Employment Authorization Document (EAD) instead, and some nonimmigrant categories do not routinely receive one.

This gap arises because a visa stamp can expire while the holder maintains valid nonimmigrant status. A person who entered on a valid visa, later extended or changed status through U.S. Citizenship and Immigration Services (USCIS), and now holds a current Form I-94 or approval notice, may remain lawfully present even though the visa stamp has lapsed. Texas’s current rule accommodates that situation by accepting an expired visa; the proposed REAL ID alignment would not.

Thus, this is a documentation issue, not a lawful-presence issue. U.S. Customs and Border Protection treats Form I-94 as proof of legal visitor status, so an affected worker can still demonstrate lawful presence. However, the worker may not be able to satisfy the REAL ID foreign-passport document checklist once the visa stamp expires. This situation is most likely to affect employees relocating to Texas after a visa stamp has expired and who have no immediate need to obtain a new one.

Texas Today vs. REAL ID Alignment

Next Steps

Nonimmigrant employees planning to obtain an initial Texas driver’s license or identification card—particularly those moving to Texas—may want to confirm before applying that they hold an acceptable REAL ID document, such as an unexpired EAD or a passport with a valid, unexpired U.S. visa and an approved Form I-94. Because DPS has only proposed this amendment, the current rule remains in effect until adoption, and timing may matter for applicants near the effective date.

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

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Quick Hits

• On July 24, 2026, the U.S. Court of Appeals for the First Circuit denied the federal government’s request to pause a Massachusetts district court ruling that struck down the $100,000 H-1B fee.
• The fee, imposed by a September 2025 presidential proclamation, applied to certain new H-1B petitions for beneficiaries who would be approved through consular processing abroad.
• Because the stay was denied, the fee is not currently enforceable while the government’s appeal proceeds.
• Federal courts have reached conflicting conclusions on the fee, leaving open the possibility of further review, potentially up to the U.S. Supreme Court.

Background

On September 19, 2025, President Donald Trump issued a proclamation imposing a one-time $100,000 fee on new H-1B petitions filed on or after September 21, 2025, for beneficiaries who would be approved through consular processing abroad. The administration described the fee as a measure to curb perceived abuse of the H-1B program and to protect U.S. workers, particularly in science, technology, engineering, and mathematics (STEM) occupations.

The proclamation drew challenges in more than one federal court, and those courts have not agreed. In December 2025, a federal district court in Washington, D.C., ruled for the government in a case brought by the U.S. Chamber of Commerce and other business groups, finding the fee within the president’s existing authority over noncitizen entry. That decision is now under review at the U.S. Court of Appeals for the D.C. Circuit.

A separate suit, filed in December 2025 by a coalition of twenty states led by California, was brought in federal district court in Massachusetts. The states argued that the fee undermined the basic function of the H-1B program by making it harder for U.S. employers to fill their labor needs. On June 8, 2026, the Massachusetts court sided with the states and vacated the fee policy in its entirety, reaching the opposite result from the D.C. Circuit. The court concluded that the fee functions as a tax rather than a routine regulatory charge, and that the president’s statutory authority to restrict the entry of noncitizens does not extend to imposing a tax. The court separately found that the agencies’ rollout of the fee did not comply with federal rulemaking requirements.

The government appealed and sought a stay pending appeal. The district court declined to stay its ruling on the merits but granted a brief administrative stay so the U.S. Court of Appeals for the First Circuit could weigh in, which allowed U.S. Citizenship and Immigration Services (USCIS) to continue collecting the fee in the interim. On July 24, 2026, the First Circuit denied the government’s stay request, finding that the government had not shown it was likely to succeed on appeal or that the states would avoid substantial harm if the fee were allowed to resume.

Summary of Ongoing Litigation

Next Steps

As a practical matter, the First Circuit’s denial of the stay means the $100,000 fee is not currently enforceable for new H-1B petitions that would otherwise require consular processing. Employers may begin to see approvals issue on petitions that had previously been held up by the fee requirement, and should expect USCIS and the U.S. Department of State to issue updated guidance reflecting the change, although the timing of that guidance is not yet known.

The July 24 ruling addresses only the stay request and does not resolve the merits of the government’s appeal, which remains pending, along with the possibility of further stay requests or review by the Supreme Court of the United States. Given the conflicting rulings so far, employers may want to retain documentation of any fees previously paid in the event a future ruling reinstates the requirement or establishes a path to refunds.

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

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The settlement arrives as the SBA is simultaneously overhauling the eligibility standards for its 8(a) Business Development Program, moving away from race-based presumptions of social disadvantage toward a new, discrimination-based test. Together, these developments underscore why businesses participating in SBA set-aside programs must stay current on evolving eligibility rules and ensure their certifications are well-documented to avoid inadvertent misrepresentations that could expose them to FCA liability.

Quick Hits

• The DOJ announced a $21.3 million False Claims Act (FCA) settlement with two government contractors and their executives who allegedly used service-disabled veteran-owned small businesses (SDVOSBs) as pass-through entities to obtain federal set-aside contracts.
• The settlement illustrates the DOJ’s aggressive enforcement posture against businesses that misrepresent or manipulate SBA eligibility criteria across small business set-aside programs.
• Meanwhile, SBA eligibility criteria are themselves in flux. The SBA continues to redefine who qualifies for set-aside programs, having moved to eliminate the race-based presumption of social disadvantage under the 8(a) Business Development Program in favor of a discrimination-based eligibility test.
• Businesses in SBA set-aside programs should track these evolving standards and keep eligibility documentation current and supportable to avoid inadvertent misrepresentations that could trigger FCA liability.

The DOJ’s Set-Aside Fraud Enforcement

On June 9, 2026, the DOJ announced that two government contractors, along with two of their executives, had agreed to pay $21.3 million to resolve FCA allegations that they had used purported SDVOSBs and other small businesses as pass-through entities to improperly obtain federal set-aside contracts. The settlement resolved a qui tam action, United States ex rel. Welch, et al. v. American First Contracting Inc., et al., No. 5:23-cv-0525 (N.D.N.Y.); the two whistleblowers will receive approximately $3.67 million as their relators’ share under 31 U.S.C. Section 3730(d). According to the settlement agreement, the companies identified opportunities, prepared and priced bids, and controlled contract execution and finances, while the purported SDVOSBs served as prime contractors in name only, receiving a fixed percentage of the contract value regardless of work performed. The arrangements took the form of teaming agreements, joint ventures, and mentor-protege relationships. At least one SDVOSB owner raised compliance concerns, but the defendants made no material changes in response, and neither company independently qualified as a “small business concern” under SBA regulations.

In a press release announcing the settlement, Assistant Attorney General Brett A. Shumate stated that the DOJ would “hold accountable those who fraudulently obtain, or assist others in fraudulently obtaining, these set-aside contracts.” The case reflects the DOJ’s enforcement focus on SBA set-aside programs and indicates the DOJ’s view that misrepresenting or manipulating SBA eligibility criteria, whether for SDVOSB, 8(a), HUBZone, Women-Owned Small Business, or other set-aside categories, is an enforcement priority. The $21.3 million settlement, including $4 million and $225,000, respectively, in individual liability from the two executives, is notable for its scale and confirms that the DOJ will pursue substantial recoveries in set-aside fraud cases. The whistleblowers/relators’ $3.67 million share (17.25 percent of the recovery) underscores the financial incentive for insiders and competitors to file qui tam actions.

Notably, although the original qui tam complaint was filed against both the large and the pass-through small businesses, the government intervened only against the larger entities and settled only with them—which could signal an intensified enforcement focus on the companies at the top of pass-through arrangements.

While this settlement specifically involved SDVOSB status, the SBA is simultaneously redefining eligibility for other set-aside programs, particularly the 8(a) Business Development Program. As we discussed in our February 5, 2026, article, “New SBA 8(a) Guidance Signals Shift in Interpretation of Who Is ‘Socially and Economically Disadvantaged,’” the SBA moved in January 2026 to a strictly race-neutral, fact-specific standard for establishing social disadvantage, eliminating reliance on group-based presumptions. As we discussed in more detail in our June 17, 2026, article, “SBA’s Proposed 8(a) Rule Flips the Script: DEI Programs Could Now Be Evidence of Social Disadvantage,” the SBA has since proposed to formalize that shift by amending 13 C.F.R. Section 124.103. The proposed rule, published in the Federal Register on June 11, 2026, would replace the existing tests for social disadvantage under Section 8(a) of the Small Business Act (15 U.S.C. Section 637(a)(5)) with a new, sole eligibility standard that would:

• formally remove the rebuttable presumption of social disadvantage for members of certain racial and ethnic groups;
• require a showing that a governmental or private entity discriminated against, or favored a group to the exclusion of, the applicant’s group, causing “material harm” (broadly defined as loss of access to or diminished opportunities related to economic advancement);
• allow applicants to self-certify group membership and material harm, without requiring proof that the discrimination directly affected entry into or advancement in business; and
• treat unlawful DEI programs, affirmative action policies, and race-based quotas or set-asides as qualifying evidence, potentially including corporate DEI program materials.

The proposed rule would also eliminate the prior non-presumptive test and the process for adding groups to the presumption list. The comment period closed on July 13, 2026, with 132 comments submitted.

The SBA has not approved a new 8(a) application since August 2025, and active firms have fallen below 3,000, so the rule primarily affects the pipeline of new applicants, though current participants should expect heightened oversight as well.

Evolving Eligibility Rules May Increase FCA Risk

This settlement and the SBA’s evolving 8(a) eligibility framework are two sides of the same coin for businesses operating in federal small business contracting.

The DOJ is actively using the FCA to enforce compliance with SBA set-aside categories. Whether the program at issue is SDVOSB, 8(a), or another socioeconomic classification, the DOJ is likely to pursue substantial recoveries against businesses that misrepresent their qualifying status, and qui tam whistleblowers have a strong financial incentive to bring these cases. At the same time, the SBA is fundamentally changing the rules that define who qualifies.

The elimination of the race-based presumption and the adoption of a discrimination-based test mean businesses can no longer rely on legacy assumptions about eligibility, and documentation adequate under the prior “social disadvantage narrative” approach may not satisfy the new standard. This combination of aggressive enforcement and shifting rules increases the risk of inadvertent misrepresentation. Certifying eligibility based on outdated criteria or legacy structures that no longer satisfy current requirements may be viewed as a false statement to the government, and under the FCA’s “knowing” standard, even a failure to keep pace with evolving rules can support liability.

What This Means for Businesses

Businesses should consider the following compliance steps in light of this settlement and the SBA’s ongoing regulatory changes:

• Audit ownership and control arrangements. Evaluate whether the certified small business in any teaming, joint venture, or mentor-protege structure genuinely owns, controls, and performs a commensurate share of the work.
• Monitor evolving 8(a) and other socioeconomic eligibility standards. Track the SBA’s final rulemaking on 13 C.F.R. Section 124.103, since the 8(a) presumption is being eliminated in favor of a discrimination-based test.
• Keep documentation current. Ensure eligibility documentation, whether addressing social disadvantage under 8(a), veteran ownership and control under SDVOSB rules, or size standards under 13 C.F.R. Part 121, reflects requirements as they exist today, not legacy standards.
• Take whistleblower risk and internal red flags seriously. The relators in this case received a $3.67 million share, and ignoring credible compliance concerns, as occurred here, can support a finding of “deliberate ignorance” or “reckless disregard” under the FCA.

Looking Ahead

The convergence of aggressive FCA enforcement and shifting SBA eligibility rules demands continuous attention. This settlement signals that the DOJ will pursue substantial recoveries against businesses that misrepresent their eligibility, and the evolving 8(a) standard means the definition of “eligible” is itself a moving target.

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 Construction, Diversity, Equity, and Inclusion Compliance, Ethics/Whistleblower, 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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