Quick Hits

• On September 14, 2026, Cal/OSHA released a discussion draft of a proposed rule that would require covered hospitals to screen individuals and their personal items at all unrestricted entrances, not just the specific entrances identified in AB 2975, with an exception for the ambulance entrance.
• Screening personnel would need at least eight hours of initial training covering an expanded curriculum, annual refresher training, and additional training when specified equipment, work practices, or hazards change. Trained personnel other than healthcare providers would need to operate and monitor screening devices whenever covered entrances are accessible to the public.
• AB 2975 requires the Occupational Safety and Health Standards Board to amend the standards by March 1, 2027, and requires a hospital compliance effective date no more than ninety days after adoption.

The draft would implement Assembly Bill (AB) No. 2975 and establish detailed requirements for hospital weapons screening, including screening at all unrestricted entrances, personnel training, and procedures for responding to detected weapons. Cal/OSHA is accepting comments through October 12, 2026.

The proposed amendments would add a weapons detection screening policy requirement to Title 8, Section 3342, California’s existing healthcare workplace violence prevention regulation. Proposed subsection (i) would apply to general acute care hospitals, acute psychiatric hospitals, and special hospitals.

Weapons Detection at All Unrestricted Entrances

AB 2975 identifies three screening locations: the hospital’s main public entrance, the emergency department entrance, and the labor and delivery entrance when separately accessible to the public. The discussion draft would go further, requiring a written policy providing for automatic screening of a person’s body and personal items at all unrestricted entrances, including those three locations.

The draft defines an “unrestricted entrance” as an entrance open to any individual without locks or access-control systems. It expressly excludes the ambulance entrance from proposed subsection (i).

For employers, this broader language could affect both equipment costs and staffing needs.

Screening Equipment and Limited Exceptions

The draft identifies several screening technologies, including walk-through metal detectors, x-ray and computed tomography screening systems, millimeter-wave screening systems, artificial intelligence-assisted weapons detection systems, and magnetic anomaly detection systems.

Consistent with AB 2975, handheld metal detector wands generally could supplement other weapons detection devices but could not serve as the sole screening equipment. The draft would preserve exceptions for qualifying small and rural hospitals; entrances with existing spacing limitations where other equipment would violate Title 24 standards; and hospitals exclusively providing extended hospital care to patients with complex medical and rehabilitative needs, including certain long-term care hospitals or inpatient rehabilitation facilities.

These exceptions concern the restriction on using handheld wands alone; they would not exempt qualifying hospitals from the screening policy requirements generally.

Personnel Assignments and Screening Coverage

Hospitals would need to assign appropriately trained personnel, other than health care providers, to implement the screening policy and monitor and operate devices at each covered entrance whenever it is accessible to the public.

Personnel Education and Training

The draft would retain AB 2975’s minimum of eight hours of training while specifying seventeen training topics. These include weapons and threat recognition, equipment operation and limitations, safe searches, de-escalation, implicit bias, disability awareness, emergency response, and applicable reporting and recordkeeping requirements. The curriculum would also address sharps and biological hazards encountered during searches and require practical exercises, hands-on equipment operation, and demonstration of competency.

Annual refresher training would be required, along with additional training when new equipment or work practices are introduced or a new or previously unrecognized weapons-screening hazard is identified. Employers would need to ensure that employees successfully completed the applicable training.

Employee and Health Care Provider Screening Exceptions

Hospitals could choose to exclude current hospital employees and hospital health care providers from screening when they enter wearing identification badges displaying their photograph, name, and title. The photograph requirement is an additional condition beyond the name and title language in AB 2975. The exclusion would be discretionary, not automatic.

Alternative Search and Screening Protocols

The written screening policy would need to address alternative searches and screening for patients, family members, or visitors who refuse device screening. Only personnel who completed the applicable training could search personal belongings at unrestricted entrances or confiscate weapons when hospital policy authorizes confiscation.

Response Protocols for Detected Weapons

Hospitals would need protocols addressing how they respond when a dangerous weapon is detected. An individual who triggers a screening device would have to be permitted to leave with the detected object and return without it. Entry could not be denied solely because the individual previously possessed that object.

Public Notification

The draft would require highly visible notices in conspicuous locations near unrestricted entrances where screening devices are used. The notices would advise that weapons screening occurs upon entry but that no person will be refused medical care pursuant to the federal Emergency Medical Treatment and Active Labor Act (EMTALA).

Next Steps

Cal/OSHA has requested comments on the discussion draft by October 12, 2026.

Although the draft does not establish a specific hospital compliance date, AB 2975 requires an effective date no more than ninety days after the amended standard is adopted. March 1, 2027, is the Occupational Safety and Health Standards Board’s adoption deadline, not a hospital compliance deadline or a guarantee of a full ninety-day implementation period.

Hospitals may wish to begin evaluating entrance configurations, equipment options, staffing models, and training programs while the proposal remains under development. They may also consider how a screening policy would integrate with existing workplace violence prevention plans and incident-response procedures. The discussion draft remains subject to change and does not replace employers’ current obligations under Section 3342.

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

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A “quiet promotion” typically involves an employee performing higher-level duties, such as leading projects, supervising others, making budget decisions, or handling strategic work, without an official promotion or pay adjustment. The gap can persist for months or even years, becoming normalized with hiring stalls or shifting staffing plans. While stretch roles can be positive when intentionally designed and limited in duration, they may become problematic when an employer derives ongoing work product without commensurate compensation or a timely path to formal advancement for the employee.

Quick Hits

• “Quiet promotion” occurs when an employee takes on higher-level responsibilities without formal promotion or corresponding pay adjustment.
• Misaligned job titles, duties, and pay bands may obscure disparities and complicate pay discrimination analyses. Quiet promotions may also raise concerns regarding disparate treatment or disparate impact, salary transparency, and overtime exposure.
• Employers may be able to reduce risk by defining temporary roles’ scope and maximum duration, documenting expectations and review dates, and reviewing positions’ duties and compensation as higher-level duties continue.
• Regularly updated job descriptions, manager training, proactive pay equity analyses, stronger pay transparency communication, and reclassification can help align actual work, titles, and compensation.

Pay Discrimination Risks

Federal and state employment laws generally prohibit pay discrimination. The legal framework for pay discrimination analyzes whether employees performing substantially similar work are paid equitably after controlling for legitimate, job-related factors. Quiet promotions may complicate this analysis in two related ways: First, if a company’s job architecture does not accurately reflect current job duties, then two employees with the same title or at the same organizational level may be doing markedly different work. Second, and conversely, two employees doing comparable work may have different titles and pay bands. Without accurate job titles, job duties, and pay alignment, a pay equity analysis will not identify meaningful disparities or reveal gaps that may not be explainable by nondiscriminatory factors, potentially leaving employers at a disadvantage when faced with pay discrimination lawsuits.

Additionally, quiet promotions may trigger the following risks:

• Disparate treatment and disparate impact. If quiet promotions cluster among particular groups of employees—such as women or individuals of a certain race—without timely compensation adjustments, disparities may give rise to claims of intentional discrimination or adverse impact.

• Salary transparency compliance. In jurisdictions with pay transparency laws, employers must disclose pay ranges in postings, and, in some cases, to current employees upon request. Employees’ dawning realization that they may be performing the duties of posted higher-level roles at lower pay ranges may give rise to internal complaints, external scrutiny, or legal claims.

• Classification and overtime exposure. Expanded responsibilities sometimes lead employers to treat an employee as de facto exempt or as if the employee has managerial authority. However, if classification does not meet the applicable exemption tests, uncompensated overtime exposure may follow.

• Documentation gaps. Ideally, pay decisions will be anchored in consistent, job-related factors such as experience, skills, performance, geography, and market data. Quiet promotions often emerge through informal arrangements or are communicated as being temporary, leaving limited documentation to justify compensation rates.

Practical Steps to Reduce Risk

Quiet promotions or “stretch” opportunities are not inherently problematic. However, they are best executed when they are intentional, documented, time-limited, and tied to a clear development or promotion pathway. Employers can mitigate pay discrimination risks by establishing process guardrails that prevent quiet promotions from becoming permanent pay inequities.

First, employers may want to consider defining interim assignments in both scope and duration, setting maximum durations for acting or temporary roles, and requiring reevaluation at predefined checkpoints. Employers should strongly consider documenting these decisions (i.e., expectations, duration, and review dates).

Second, if an interim assignment exceeds its defined duration, an employer may consider realigning job duties and titles. In other words, if an employee is performing a higher-level role successfully beyond the interim window, an employer may initiate formal reclassification and adjust compensation to the applicable range. Conversely, if the business cannot support the higher-level role, the job duties could be narrowed in scope and level of responsibility to align with the employee’s pay band.

Third, relatedly, employers could monitor job architecture and leveling. As job duties evolve and positions change, employers will ideally maintain up-to-date, specific job descriptions outlining the scope and competencies of each role. Managers could also be trained to understand the distinctions between job levels so expanded responsibilities are recognized and flagged for review. Formal promotions and pay adjustments may then occur through a structured and consistent process.

Fourth, employers may want to perform proactive, privileged pay-equity analyses. These analyses can be scheduled to occur on a regular cadence, such as biannually or after major reorganizations. Ideally, these analyses evaluate both base pay and variable compensation, looking beyond job titles and into actual duties.

Fifth, as pay transparency laws continue to proliferate across the country, employers can strengthen pay transparency compliance efforts and bolster employee communication about their compensation philosophies. Employers that provide clear pay ranges, explain how ranges are set, and outline promotion pathways build employee trust and a positive culture. As part of these communication efforts, employers may want to be prepared to explain how interim assignments fit into their job architecture and compensation planning.

Sixth, managers can be trained to recognize when developmental or stretch opportunities are becoming quiet promotions and empowered to request reclassifications when appropriate.

Key Takeaways

Employers need to be nimble to navigate turnover, growth, and evolving economic realities. Quiet promotions may result from that flexibility. At the same time, employers can take steps to ensure that their quiet changes do not lead to loud lawsuits. By setting clear interim rules, aligning titles and pay with actual work, and auditing outcomes regularly, employers can preserve operational agility while meeting their legal obligations.

Ogletree Deakins’ Pay Equity Practice Group and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Employment Law, Global Reorganizations, Pay Equity, Reductions in Force, Wage and Hour, and Workforce Analytics and Compliance blogs as additional information becomes available.

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Quick Hits

• A choice-of-law clause stating, “German law applies to the employment relationship,” lacks transparency and is invalid if it does not indicate that mandatory foreign employee protections may still apply.
• For employees who work permanently from a home office abroad, the law of the habitual place of work may govern the validity of a termination of employment.
• The validity of the choice-of-law clause, however, is determined by the law that would apply under the Rome I Regulation if the choice of law were effective, which in this case is German law.

The Case—Termination During Permanent Remote Work in the Netherlands

The employee, a Dutch national, had been employed by a German employer since 2018. The employment contract contained the following clause: “German law applies to the employment relationship.” Beginning in March 2020, the employee worked exclusively from the employee’s home office in the Netherlands, initially because of the pandemic and later on a permanent basis. In January 2023, the employer terminated the employment relationship for operational reasons in two letters, one in English and one in German. At that time, the employee was unable to work due to illness. The employee argued that Dutch law applied and that the termination letters were invalid.

The Decision—Choice-of-Law Clause Fails Transparency Review of Standard Terms and Conditions

The generalized application of German law agreed upon in a standard-form employment contract is invalid because the clause lacks transparency. It gives the impression that German law is the exclusive governing law for the contract and fails to disclose that, under Article 8(1) sentence 2 of the Rome I Regulation, the employee retains the protection of mandatory provisions of the law that would apply absent the choice of law.

Because the choice-of-law clause was invalid, Article 8(2) of the Rome I Regulation applied and pointed to the law of the country in which or from which the employee habitually carried out work. Because the employee had most recently worked permanently from a home office in the Netherlands, Dutch law applied. Under Dutch law, termination while an employee is unable to work due to illness is prohibited. In addition, the employer was required to obtain prior written approval from the competent Dutch authority, the Dutch Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen (UWV)), for a termination for operational reasons. Both termination notices were therefore invalid.

Prohibition on Termination During Illness and Agency Approval Requirement for Operational Terminations in the Netherlands

Under Dutch law, termination is prohibited while an employee is unable to work due to illness. Under German law, an employee’s inability to work due to illness does not automatically render a termination invalid. Instead, the validity of the termination depends on whether a valid termination reason exists. Unlike German law, a termination for operational reasons also requires the consent of the competent authority. In this case, Dutch law was therefore significantly more favorable to the employee.

The Court’s Guidance—Keeping Employment Contract Terms Current

The BAG noted that a choice-of-law clause may satisfy the transparency requirement if it states that the choice of law does not apply to the extent mandatory provisions of the law that would apply absent the choice of law govern.

The practical effect of such a clarified clause may be limited, because mandatory protections under the law that would apply absent the choice of law may still apply.

It is much more important to ensure that employment contracts are concluded under the law of the place where employees regularly perform their work. If the regular place of work changes during employment, a contractual adjustment can become relevant in light of the law of the new place of work.

Takeaways

The decision shows that a simple choice-of-law clause in favor of German law is not sufficient in cross-border employment relationships and offers no advantages. If the place of work changes during the course of employment, for example in the case of a home office abroad, employers may want to carefully review whether a contractual adjustment tailored to the law of the foreign place of work is appropriate. Where the legal systems of several countries are relevant, it is often difficult to determine which legal system is more favorable to the employee in an individual case. The rules of different countries are often simply incompatible.

Dr. Ulrike Conradi is managing partner in Ogletree Deakins’ Berlin office.

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

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.

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Quick Hits

• TPS protection for El Salvador was previously scheduled to end on September 9, 2026, but USCIS has not announced a formal extension, termination, or blanket EAD auto-extension date beyond the current alert.
•  Salvadoran individuals present in the United States retain their TPS protection, including work authorization, pending a further announcement.

On January 17, 2025, the U.S. Department of Homeland Security (DHS) published a Federal Register notice extending El Salvador’s TPS designation for eighteen months, from March 10, 2025, through September 9, 2026. The notice allowed eligible existing Salvadoran TPS beneficiaries to retain TPS through September 9, 2026, if they continued to meet eligibility requirements, and established a re-registration period from January 17 through March 18, 2025. DHS stated that USCIS would issue new employment authorization documents (EADs) with a September 9, 2026, expiration date to eligible beneficiaries who timely re-registered and applied for employment authorization.

USCIS also issued employer-facing guidance for certain Salvadoran TPS beneficiaries whose TPS-based EAD renewal applications remained pending. Qualifying employees could receive a USCIS notice extending an expired TPS-based EAD through September 9, 2026, and could present that notice with the expired EAD as List A documentation for Form I-9 purposes. USCIS instructed employers to use September 9, 2026, as the employment authorization expiration date for Form I-9 and E-Verify purposes.

USCIS’s current alert states that Salvadoran individuals present in the United States under TPS retain protection, including work authorization, pending a further announcement. Substantive updates are expected to be published on the USCIS El Salvador TPS webpage and the USCIS I-9 Central webpage for Form I-9 Related news.

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 August 31, 2026, the SEC and the FDA signed an agreement to enhance cooperation on regulatory and enforcement activities.
• The agencies will share information related to FDA-regulated products and companies that sell FDA-regulated products.
• The MOU signals enhanced interest by the SEC related to potential misstatements to investors by companies in the drug and medical device approval process.
• The agreement will remain in place for at least three years.

The SEC and the FDA agreed to expand information-sharing to enhance market oversight and legal compliance in the industries they regulate. Under the agreement, the SEC may use nonpublic information received from the FDA to inform any public company filing review to ensure compliance with the federal securities laws and in connection with any enforcement investigation or civil action within the SEC’s jurisdiction.

The MOU specifically mentioned situations where a company “may have disseminated false or misleading statements to the investing community, such as representations about the status of FDA review, product approvals, clinical trial results, or other matters within the FDA’s regulatory authority that could affect investors’ decisions.”

This is an important development because it shows that the SEC and the FDA will be focused on potential misstatements made in public statements related to new drug and medical device offerings or other issues that may impact both the FDA and the SEC. This development, in conjunction with the FDA previously publishing complete response letters for approved and unapproved drugs and devices, shows the Trump administration’s focus on transparency in this area and the potential for increased enforcement risk. 

Key Takeaways

The MOU raises several takeaways:

• Company hotlines are important sources of information: Many times, robust internal reporting channels catch issues early. In at least one other SEC/FDA matter, internal whistleblowers alerted a company’s board to disclosure issues, and the company was able to take prompt remedial action, resulting in no SEC civil penalty for the company.
• Prompt internal investigations pay off with regulators: A company that conducts a prompt and robust internal investigation and shows a clear and thorough response to an internal tip will be better situated to self-correct and have a defensible position, if regulators or law enforcement become involved.
• Statements related to FDA correspondence, actions, and review timelines: Decisions frequently need to be made regarding what, if, and when to communicate to investors regarding the FDA review process or other interactions with the FDA. With the new MOU in place, any disclosures about the FDA review process likely will receive close attention, so companies will want to ensure they are accurate. Companies may want to especially consider statements that downplay bad news, as the SEC may view them as being materially misleading or reflecting omissions of material information. With the new MOU in place, the SEC likely will be privy to communications from the FDA to the company and will compare it to the public statements and disclosures.
• Proper disclosure controls and training: Companies may wish to consider whether they maintain disclosure controls and procedures designed to ensure that information the company discloses is accurate. Misleading statements can be found in any public statement, such as investor documents, SEC filings, press releases, speeches, website updates, etc. Companies may want to consider training for management and directors related to disclosure controls and procedures because they may be liable for misstatements made by management and directors.

Ogletree Deakins’ Financial Services Industry Group and Healthcare Industry Group will continue to monitor developments and will post updates on the Ethics/Whistleblower and Healthcare 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.

Jane A. Norberg is a shareholder in Ogletree Deakins’ Washington, D.C., office. She is the former Chief of the Office of the Whistleblower and a Senior Officer in the Division of Enforcement at the SEC.

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

• On July 17, 2026, DHS published a final rule—scheduled to take effect on September 15, 2026—that would end the longstanding duration of status framework for F, J, and I visa holders.
• A U.S. district court found that the government’s national security justification for the rule was arbitrary and capricious.
• The duration of status framework remains in effect as litigation continues.

On July 17, 2026, DHS published a final rule scheduled to take effect on September 15, 2026, that would replace the duration of status (D/S) admission framework for F, J, and I nonimmigrants with fixed periods of admission. The rule also shortened the departure grace period for F and J visa holders from sixty days to thirty days and imposed a modified unlawful presence framework—one based on failure to timely file an extension-of-stay application rather than a formal U.S. Citizenship and Immigration Services (USCIS) finding of a status violation or an immigration judge’s removal order. Additionally, the rule imposed certain restrictions on F-1 students’ ability to transfer schools or change academic programs.

On August 18, 2026, a coalition of plaintiffs led by the Presidents’ Alliance on Higher Education and Immigration filed a complaint and motion for preliminary injunction in the U.S. District Court for the District of Massachusetts challenging DHS’s final rule. The complaint argued that DHS violated the Administrative Procedure Act, provided an inadequate public comment period, and exceeded its statutory authority. The plaintiffs contended that the changes would create significant uncertainty and administrative burdens for impacted individuals and institutions. On the eve of the rule’s effective date, the district judge in Presidents’ Alliance v. DHS granted nationwide preliminary relief, finding that DHS’s stated justifications were arbitrary and capricious and that allowing the rule to take effect would cause immediate and irreparable harm.

Next Steps

For now, F, J, and I visa holders do not need to apply for extensions of stay with USCIS and those traveling to the United States will continue to be admitted in D/S status. Employers and foreign nationals should remain vigilant and may want to be prepared for a possible reversal while the litigation continues.

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

• In Ding v. Structure Therapeutics, Inc., the Ninth Circuit held that a plaintiff’s right to proceed in court under the EFAA is not categorically foreclosed by the earlier filing of an arbitration demand asserting non–sexual-harassment claims.
• The court held that where a plaintiff discovers a basis to pursue claims covered by the EFAA during arbitration, the plaintiff may elect to end arbitration and proceed in court.
• The court further held that a sex-based hostile work environment claim under FEHA constitutes a “sexual harassment dispute” under the EFAA.

Background

The plaintiff, a senior executive at a clinical drug development company, began working as the company’s chief financial officer (CFO). As part of her employment, the plaintiff signed an employment agreement that required the resolution of all employment disputes by arbitration. According to her complaint, upon starting her employment, the company’s chief executive officer (CEO) almost immediately began to sideline her, diminish her job responsibilities, and adopt gendered criticisms that she was “too aggressive.” The plaintiff additionally alleged that after she experienced a domestic violence incident, the CEO allegedly belittled her injuries, questioned her ability to continue in her role, and recommended her termination within two weeks of the incident, citing her “domestic situation” as a factor.

The plaintiff initially filed an arbitration demand asserting claims for discrimination, retaliation, and harassment based on national origin and her status as a domestic violence victim. Over the course of a year, the parties engaged in extensive arbitration proceedings, including preliminary hearings, discovery, and discovery disputes. During that process, the plaintiff uncovered new evidence suggesting that the alleged workplace mistreatment she experienced had been motivated by her sex. She then withdrew from arbitration and filed a complaint in state court, asserting sex discrimination and sex-based hostile work environment claims under FEHA. The company removed the action to federal court and moved to compel arbitration. The district court denied the motion, holding that the plaintiff had properly elected to proceed in court under the EFAA. The company appealed.

The Ninth Circuit’s Analysis

Whether an Employee Can Invoke the EFAA After Already Participating in Arbitration

As to whether the plaintiff properly elected to proceed in court under the EFAA despite having already initiated and participated in arbitration, the Ninth Circuit held that the plain text of the EFAA does not limit when a plaintiff may allege a sexual harassment claim and exercise his or her right under the statute. The court stated that the purpose of the EFAA was to provide alleged victims of workplace sexual harassment or sexual assault a “genuine choice” whether to proceed in arbitration or in court, notwithstanding a preexisting arbitration agreement. The court reasoned that the EFAA suggests only that a plaintiff may not make her “election” until the time she is “alleging conduct constituting a sexual harassment dispute or sexual assault dispute.” According to the court, nothing in the text of the EFAA indicates that the earlier filing of other claims extinguishes a plaintiff’s right to decide whether to arbitrate his or her sexual harassment or sexual assault claims, provided the employee did not know that the plaintiff had a plausible sexual harassment or sexual assault claim.

The court further emphasized the EFAA’s legislative purpose, which is to “restore access to justice for millions of victims of sexual assault or harassment who are currently locked out of the court system.” The legislative history repeatedly emphasized the need to give victims a “real choice” to bring their claims in court. To read otherwise, according to the court, would render a plaintiff unable to have her sexual harassment or sexual assault claim heard in court before she even knows that she has such a claim.

Of note, the court clarified that its holding does not mean that a plaintiff may start in arbitration, bring a sexual harassment claim at any time or under any circumstances, and then pursue the claim in court. A plaintiff may waive his or her EFAA rights under ordinary waiver principles—i.e., where a plaintiff is aware of the facts giving rise to a sexual harassment claim and either unduly delays or decides to pursue that claim in arbitration rather than court. In this case, the district court found no evidence that the plaintiff knew that she had a plausible sexual harassment claim but intentionally chose not to bring it when she initiated arbitration. The Ninth Circuit agreed with the district court’s determination.

Sex-Based Hostile Work Environment as ‘Sexual Harassment Dispute’ Under the EFAA

As to whether the plaintiff had plausibly stated a sexual harassment claim within the meaning of the EFAA, the Ninth Circuit looked to FEHA, under which harassment “because of sex includes sexual harassment” and “[s]exually harassing conduct need not be motivated by sexual desire.”

The court held that because “it is the disparate treatment of an employee on the basis of sex … that is the essence of a sexual harassment claim,” a sex-based hostile work environment claim amounts to sexual harassment under California law even when the harassing conduct is not sexual in nature. With all reasonable inferences drawn in the plaintiff’s favor, the court found that she had plausibly pled a sex-based hostile work environment claim based on alleged conduct including the CEO’s alleged preference for a male CFO, his sidelining of the plaintiff and diminishing of her job responsibilities, his adoption of sexist criticisms from male colleagues, and his belittling of her domestic violence experience before terminating her within two weeks of the incident.

Finally, the court noted that because the EFAA invalidates an arbitration agreement “with respect to a case,” rather than a claim, that “relates to” a sexual harassment dispute, the plaintiff was entitled to bring her entire case in court, including her non–sexual-harassment claims.

Key Takeaways

The Ninth Circuit’s decision in Ding v. Structure Therapeutics addressed a plaintiff’s purported discovery of a sexual harassment claim during pending arbitration. The decision creates uncertainties for employers around a plaintiff’s ability to make a mid-arbitration election to invoke the EFAA and the effect such an election may have on the arbitration as a whole.

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

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Quick Hits

• The DOL recently issued guidance indicating that the department intends to focus enforcement on three categories of health plan nonquantitative treatment limitations (NQTLs): (1) plan exclusions and some treatment limitations, (2) medical necessity standards and review process, and (3) standards for determining network adequacy with a focus on network admission standards and provider reimbursement methodologies.
• The DOL will not enforce certain regulations concerning NQTLs that were part of a 2024 final rule.
• The guidance reflects that the DOL will focus on common NQTLs, including treatment limitations, such as prior authorization rules, fail-first or step therapy protocols, medical necessity standards, and network access.

The MHPAEA, as amended in 2021, generally prohibits group health plans from offering health coverage that imposes more restrictive requirements and limitations on mental health and substance use disorder benefits than on medical/surgical benefits.

The EBSA will now focus its primary NQTL enforcement efforts in three areas where the it believes there is the highest potential for significant harm to health plan participants:

• separate plan exclusions and some treatment limitations;
• medical necessity standards and review processes; and
• network adequacy standards, especially focused on network admission standards and provider reimbursement.

Those priorities appear consistent with the DOL’s most recent report to the U.S. Congress summarizing the EBSA’s MHPAEA enforcement activities.

In February 2025, the ERISA Industry Committee, an employer advocacy group, sued to block the DOL’s 2024 final rule to implement the MHPAEA. One key requirement in that final rule was that health plans covering specific mental health conditions or substance use disorders must provide meaningful coverage for that condition in every benefit classification where medical/surgical benefits are provided. The final rule only deems coverage to be “meaningful” if it includes at least one core treatment, meaning a standard therapy, service, or intervention supported by recognized independent standards of current medical practice for that condition in that classification. The final rule also required a plan fiduciary to attest to the plan’s compliance with the NQTL requirements.

In May 2025, federal regulators announced they would not enforce the portions of the 2024 rule that applied to NQTLs that were new compared to the 2013 final rule. The latest guidance confirms that the 2025 nonenforcement policy remains in place.

Principles Guiding Enforcement

The 2026 guidance outlines three enforcement principles:

• Federal regulators will prioritize cases involving blanket treatment exclusions applicable only to mental health and substance use disorder benefits, but may also address more limited plan exclusions, especially in response to participant complaints.
• While group health plans may continue to set narrower medical necessity limits on coverage, federal regulators will focus on prior authorization, concurrent review, and retrospective review provisions. Plan administrators may use proprietary clinical guidelines to make medical necessity determinations, as long as the processes, strategies, and evidentiary standards applied to mental health and substance use disorder benefits are comparable to, and are applied no more stringently than, those for medical/surgical benefits. However, plans must make these guidelines available to EBSA investigators and plan participants upon request.
• Federal regulators will prioritize enforcement of network adequacy rules, including network admission standards and provider reimbursement methodologies. The guidance reflects that regulators will expect the plan to “consider all available options” to ensure adequate in-network coverage for mental health and substance use disorder services.

Next Steps

Employers may wish to carefully review their group health plan design and administration to gauge compliance with the MHPAEA in light of this new guidance, as well as state laws on coverage for mental health and substance abuse disorders. Plan participants have the right to file class-action lawsuits for violations of MHPAEA. Employers that self-insure their group health plan may face an Internal Revenue Service (IRS) excise tax of $100 per day for each individual affected by violations of the MHPAEA.

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 and Healthcare 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.

Stephanie A. Smithey is a shareholder in Ogletree Deakins’ Indianapolis office.

Timothy J. Stanton is a shareholder in Ogletree Deakins’ Chicago 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 January 1, 2027, California’s minimum wage rate will rise to $17.40 per hour, reflecting a 2.99 percent adjustment based on federal inflation data.
• Employers may want to prepare for the upcoming wage adjustment and remain aware of existing higher minimum wage rates for fast food workers, health care workers, and various municipalities throughout California.

The increase is slightly larger than the $0.40 increase that took effect at the start of 2026, and it continues a trend of steady annual growth in California’s minimum wage rate since the state reached $15.00 per hour on January 1, 2023.

Under California Labor Code section 1182.12(c), California’s director of finance must annually calculate an adjustment to the state’s minimum wage rate before August 1 of each year. By law, the adjustment must be the lesser of 3.5 percent or the rate of change in the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W), which increased 2.99 percent for the period of July 1, 2025, to June 30, 2026, from the prior twelve-month period.

As with prior increases, higher wage floors already apply to certain workers and localities. A $20.00 per hour minimum wage rate continues to apply to workers at most fast food restaurants in California under the California Food Accountability and Standards Recovery Act (FAST Recovery Act). Certain healthcare workers are also subject to a higher minimum wage under Senate Bill (SB) No. 525. Additionally, several municipalities in California maintain local minimum wage rates that exceed the state requirement, so employers with operations in those jurisdictions should confirm which rate applies.

The increase in the minimum wage will also raise the minimum salary payable to certain white collar, exempt employees under California wage laws. Based on the new $17.40 hourly rate, the minimum annual salary for exempt status will rise to $72,384 from the current $70,304, an increase of $2,080. Employers should remember that satisfying the salary threshold is only part of the exemption analysis. Employees must also meet the duties test and other requirements applicable to the specific exemption claimed.

Next Steps

California employers may want to begin preparations now to ensure that their compensation structures will comply with the new minimum wage rate effective January 1, 2027, along with the higher rates already in effect for fast food workers, certain healthcare workers, and employees in several California municipalities. Employers may also want to update required workplace postings once the state’s 2027 minimum wage order and applicable industry wage order are released, and confirm that pay stubs accurately reflect each employee’s wage rate. Employers may also want to revisit exempt employee salaries now to determine whether adjustments will be needed before the new threshold takes effect.

Ogletree Deakins’ California offices and Wage and Hour Practice Group will continue to monitor developments and will provide updates on the California and Wage and Hour blogs as additional information becomes available.

The Ogletree Deakins Client Portal provides subscribers with timely updates on wage and hour laws, including minimum wage. Our updated minimum wage and minimum wage tip credit law summaries contain state and major locality current minimum wage and tip credit rates, and other future minimum wage and tip credit rates that states and major localities have published and/or announced. Full law summaries are available for Premium-level subscribers; Snapshots and Updates are available for all registered client-users. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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Quick Hits

• The California State Legislature concluded the second year of its 2025–2026 session on September 1, 2026, and sent its remaining approved bills to Governor Gavin Newsom, including measures addressing automated decision systems, workplace surveillance, pay equity enforcement, bereavement leave, and immigration-related retaliation.
• Governor Newsom must sign or veto bills passed during the legislative session by September 30, 2026, or they will automatically become law.

California Employment Bills Sent to the Governor for Signature

“Enrolled” refers to when the final version of a bill has been approved by both the Senate and the Assembly, proofread for accuracy, and certified by the legislative officers before being sent to the governor for approval or veto.

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

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