Quick Hits

• California Senate Bill 951 would require employers to provide at least ninety days’ advance written notice before eliminating positions due to AI or automation affecting twenty-five or more workers or twenty-five percent of the workforce, and to separately notify state agencies when they permanently stop hiring for roles replaced by AI.
• The bill would protect affected workers at companies with more than one hundred employees by prohibiting discharge without reasonable cause during the notice period and granting a right of first bid on other open positions within the company.
• Noncompliant employers would face liability for back pay and benefits to each affected worker, civil penalties of up to $500 per day, and potential lawsuits brought by workers, local governments, or worker representatives, with courts empowered to award attorneys’ fees and costs.

What the Bill Would Do

1. Technological Displacement Notice

An employer would be required to provide at least ninety days of advance written notice before any “technological displacement”—defined as the elimination of employment positions caused in whole or primarily by an AI system or other automated technology—if the displacement affects twenty-five or more workers or 25 percent of the workforce, whichever is less. This is a notably low threshold. By comparison, the existing California WARN Act (Cal-WARN) applies only to employers with seventy-five or more employees and requires notice only for layoffs of fifty or more workers.

Employers would be required to deliver notices to affected workers, the Employment Development Department (EDD), the local workforce investment board, and city council members and county board supervisors in each jurisdiction where the displacement occurs. The notice itself would have to contain detailed information covering the specific AI system used, the vendor that developed or sold it, the job functions being automated, the justification for the technology’s adoption, and whether retraining opportunities are available.

2. Technology Hiring Disruption Notice

Separately, employers would have to provide a written “technology hiring disruption notice” when they permanently stop hiring for an occupation or position because AI or automation has taken over that work. This notice would be sent to the EDD and the local workforce investment board. It would include the number of positions no longer being filled, the occupational classifications affected, the AI tool responsible, and whether the cessation led to the creation of any new positions elsewhere in the company.

Worker Protections During the Notice Period

Beyond the notice requirements, SB 951 would create two additional protections for affected workers:

1. Employers with more than one hundred workers would be prohibited from discharging any worker affected by a technological displacement during the ninety-day notice window without “reasonable and substantiated cause.”
2. Workers at those same employers would also be entitled to a right of first bid on any other open positions within the company.

Penalties for Noncompliance

The bill would impose substantial penalties for failure to comply. An employer that skips the required notice would be liable to each affected worker for back pay calculated at the higher of the worker’s average compensation over the last three years or their final rate—plus the value of lost benefits, including medical expenses that would have been covered under a benefit plan. Liability would be capped at sixty days or one-half the number of days the worker was employed, whichever is shorter.

On top of back pay, noncompliant employers would face a civil penalty of up to $500 per day of violation—though the penalty would be waived if the employer paid all owed back pay within three weeks of ordering the displacement. The labor commissioner would be empowered to investigate violations, examine employer books and records, and issue citations. Third parties and advocacy organizations would also be able to  file reports with the commissioner, and the bill would allow  workers, local governments, or worker representatives to bring civil actions. The bill would also empower courts to award prevailing plaintiffs their attorneys’ fees and costs.

All civil penalties collected would flow into a newly created Technological Displacement Act Fund, available to the commissioner upon legislative appropriation.

Practical Takeaways for Employers

SB 951 was introduced in February 2026 and amended for the third time in April. If it is signed into law, there are several areas employers may wish to consider:

Identifying AI and automation tools currently in use. Employers may wish to consider taking stock of which systems are currently deployed and whether any are being evaluated for roles currently filled by employees. Gaining a clear picture of potential exposure before a displacement event occurs could prove valuable.

Assessing how the bill’s workforce definitions may apply. The bill’s definition of “worker” encompasses independent contractors employed for at least six months—a broader category than most WARN-type statutes. Employers may find it worthwhile to consider whether their existing workforce planning accounts for that broader scope.

Evaluating internal notice workflows. The ninety-day window is longer than the sixty-day period under Cal-WARN. Employers may want to consider whether early coordination between technology, operations, and HR teams would help ensure that notice obligations are identified well in advance of implementation decisions.

Reviewing documentation practices around AI adoption decisions. Because the required notice would have to include the purpose and justification for using an AI tool, employers may find it useful to consider how technological decisions are currently documented and whether contemporaneous records are being maintained.

Examining existing collective bargaining agreements. For employers with unionized workforces, the bill’s right-of-first-bid provisions and discharge prohibition may interact with or conflict with existing collective bargaining agreement (CBA) terms. Employers in this situation may wish to assess how the two frameworks would apply together.

Reviewing AI vendor contracts. Because the bill would require disclosure of the entity that developed, sold, or leased the AI system involved in a displacement, employers may want to consider whether their existing vendor agreements address or permit that kind of disclosure.

Ogletree Deakins’ California offices and Technology Practice Group will continue to monitor developments and will post updates on the California, Reductions in Force, and Technology blogs as additional information becomes available.

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Quick Hits

• In Sonderling v. Ikes Artisan Pizza LLC, the DOL argued that the FLSA’s anti-retaliation provision grants courts broad authority to award punitive damages against employers.
• The case implicates an unresolved circuit split and could significantly increase financial exposure under the FLSA retaliation.

Background

The Ikes Artisan Pizza case centers on a complaint filed by the DOL in 2022 alleging that the employer retaliated against an employee for communicating with the Kentucky Labor Cabinet regarding her wages. In 2024, the U.S. District Court for the Eastern District of Kentucky denied the employer’s motion for summary judgment, which set the case on the path to trial. This also put a novel issue—whether courts have authority under the FLSA to award punitive damages against employers that retaliate against workers for exercising rights under the FLSA—squarely before the district court.

The DOL’s Argument: Broad Remedial Authority

In a brief filed on April 27, 2026, the DOL argued that the FLSA’s anti-retaliation provision provides courts with broad authority to determine what remedies are appropriate when employees face retaliation for asserting rights under the FLSA. The DOL’s argument is premised on statutory language providing that employers can be held liable for “such legal or equitable relief as may be appropriate[.]” According to the DOL, this language demonstrates that the U.S. Congress intended to give courts flexibility with remedies as necessary to deter retaliation. The DOL also claimed its position was consistent with the Seventh Circuit Court of Appeals’ 1990 decision in Travis v. Gary Community Mental Health Center Inc. in which the Seventh Circuit held that this language allowed for punitive damages in FLSA retaliation cases.

The Employer’s Response: Remedies Are Compensatory, Not Punitive

Ikes Artisan Pizza took a contrary position. It argued that the FLSA’s structure and existing case law demonstrate that punitive damages are not authorized under the FLSA. In particular, Ikes Artisan Pizza pointed out that the FLSA’s remedies provision does not specifically mention punitive damages and, as a policy matter, the FLSA is focused on compensating employees rather than punishing employers. In doing so, Ikes Artisan Pizza urged the district court to limit recovery to the types of remedies expressly listed in the FLSA or to ones substantially similar to them. It argued this would be consistent with the Eleventh Circuit Court of Appeals’ 2000 decision in Snapp v. Unlimited Concepts Inc., which held that the FLSA’s specified remedies are compensatory in nature. According to Ikes Artisan Pizza, this demonstrates that Congress did not intend to authorize punitive damages under the FLSA.

What This Means for Employers

The Sonderling v. Ikes Artisan Pizza LLC case now sits at the center of an unresolved circuit split. The outcome could have consequences for how employers assess financial risk in FLSA retaliation matters, especially in Kentucky, if not elsewhere. If the district court sides with the DOL, the potential exposure in FLSA retaliation cases would grow significantly. Employers may want to ensure their organization has robust anti-retaliation policies, train managers to recognize protected activity under the FLSA, and respond promptly and consistently when employees raise wage-related concerns. Employers may also want to document employment decisions thoroughly when an adverse action is being considered against an employee who has recently complained about wage-related concerns.

Ogletree Deakins’ Ohio offices, Employment Law Practice Group, Hospitality Industry Group, and Wage and Hour Practice Group will continue to monitor developments and will post updates on the Employment Law, Hospitality, Kentucky, and Wage and Hour blogs as additional information becomes available.

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Quick Hits

• The federal Fair Labor Standards Act (FLSA) requires for-profit employers to pay all employees for all hours worked.
• Some interns and students are not considered employees if they meet the criteria of the “primary beneficiary” test.
• Some states have laws governing unpaid internships that are stricter than the FLSA.

Unpaid internships remain fairly common in certain industries, including restaurants, publishing, television and filmmaking, music, and fashion. This designation can create legal risk if the work primarily benefits the employer.

Under the FLSA, employers must pay interns in nonexempt positions at least the minimum wage and overtime pay, unless they meet specific criteria that show the internship primarily benefits the intern. Terminology is not wholly determinative; even if the position is called a “trainee,” “intern,” “extern,” “apprentice,” “graduate assistant,” “stagiaire,” or some other term, the same legal obligations will likely apply.

In addition, several states have wage-and-hour laws with more stringent standards than the FLSA with regard to unpaid internships.

Unlike internships in the for-profit private sector, which may require a more nuanced inquiry, unpaid internships in the public sector and for nonprofit, religious, civic, or humanitarian organizations are generally permissible under the FLSA.

Working With College Students

Some businesses offer unpaid internships to college students during the summer months. Federal regulators and courts use a “primary beneficiary” test to evaluate whether such an individual is an employee entitled to minimum wage and overtime under the FLSA. The test, described by courts as a flexible one, weighs these seven factors collectively:

• The internship provides training that is similar to what’s given by an educational institution.
• The internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
• The internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
• The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
• The intern’s work complements, rather than displaces, the work of paid employees.
• The intern and the employer understand that there is no expectation of compensation.
• The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

No single factor is determinative in this test. An intern may be deemed an employee if he or she performs regular, repetitive, or substantive work that is typical for paid employees and provides an immediate labor advantage for the employer.

Next Steps

Employers may wish to have unpaid interns sign a written agreement, stating how the internship is for training, unpaid, and for a fixed duration. They may wish to maintain records showing the job duties the interns perform and when unpaid interns receive academic credit for their work.

If an unpaid intern is deemed an employee under the FLSA, the employer may be liable for back pay and damages, a consequence potentially more costly than simply paying wages for hours worked.

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

Rebecca J. Bennett is a shareholder in Ogletree Deakins’ Cleveland office.

Charles E. McDonald, III, is a shareholder in Ogletree Deakins’ Greenville 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

• Parts of Florida, Georgia, and South Carolina are experiencing unhealthy air quality due to wildfire smoke.
• Employers may need to take safety precautions against wildfire smoke to comply with the federal Occupational Safety and Health (OSH) Act and certain state-level laws.
• Some workers have disabilities that require reasonable accommodations when air quality is poor.

With heavy wildfire smoke, harmful particles, gases, and ash can seep into workplaces and homes through doors, windows, and ventilation systems, even when the doors and windows are closed.

The general duty clause of the Occupational Safety and Health (OSH) Act requires employers to provide a workplace free from recognized hazards causing or likely to cause death or serious physical harm, including wildfire smoke. Likewise, California, Nevada, and Washington have state laws that protect workers from wildfire smoke hazards.

Employers can take safety precautions like monitoring the local air quality index (AQI), performing regular maintenance on ventilation systems, keeping windows and doors closed, using air filters, and training workers to recognize the signs of excessive smoke exposure, such as chest pain, heart palpitations, dizziness, and fatigue.

Wildfire smoke may aggravate symptoms for people with asthma, chronic obstructive pulmonary disease (COPD), bronchitis, pneumonia, and migraines. It also may present extra health risks for pregnant people and anyone at higher risk of heart attack or stroke. Depending on the individual’s specific symptoms and limitations, these conditions may qualify as a disability under the federal Americans with Disabilities Act (ADA) and similar state laws. If the medical condition is short-term and relatively mild, then it may not meet the criteria for a disability under the ADA.

Disability Accommodations

For employees with a known disability, employers must engage in an interactive dialogue to identify a reasonable accommodation that allows the employee to perform the essential functions of the job. During times of heavy wildfire smoke, some employees may ask for reasonable accommodations that they don’t need on days with good air quality.

Reasonable accommodations under the ADA may include remote work, scheduling flexibility, closing windows, permitting longer rest breaks, providing N95 respirators, reducing physical demands of the job, and improving indoor air filtration with HEPA filters and HVAC maintenance.

To justify denying a reasonable accommodation, an employer must demonstrate that the accommodation would impose an undue hardship, meaning a significant cost or difficulty for business operations.

Accommodations do not need to be permanent or set in stone. They can be adjusted as air quality and worksite conditions change.

Next Steps

In locations with an unhealthy AQI, employers may wish to consider making adjustments to work schedules, reducing the physical demands of work, or moving work indoors if possible. Applying accommodations fairly and consistently can help to prevent discrimination lawsuits based on disability, gender, or other protected characteristics.

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

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

Dee Anna D. Hays is a shareholder in Ogletree Deakins’ Tampa office.

Karen F. Tynan is a shareholder in Ogletree Deakins’ Sacramento 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

• Life science employers face a rapidly evolving 2026 legal landscape spanning noncompete enforcement shifts, expanding pay transparency mandates, AI bias audit requirements, immigration overhauls, DEI program legal exposure, NLRB policy reversals, OSHA heat standards, new leave and accommodation obligations, and workforce development imperatives.
• State and federal developments are moving in different and sometimes opposing directions, with the Trump administration pulling back on certain enforcement priorities while states accelerate regulation across areas including salary disclosure, AI in employment, paid leave, and restrictive covenants.
• A proactive, systematic compliance approach can help reduce legal exposure and maintain competitive positioning in the life sciences talent market.

From shifting noncompete rules and pay transparency mandates to AI bias audits and immigration overhauls, the regulatory environment has never been more demanding.

This article organizes the most significant action items across nine compliance areas. Life sciences can use it as a spring cleaning guide to audit agreements, update policies, and prepare their organizations going forward.

1. Dusting Off Noncompete Agreements and Trade Secret Protections

The noncompete landscape has shifted dramatically at both the federal and state levels, and life science employers may want to make their restrictive covenant agreements a top priority this spring.

At the federal level, the Federal Trade Commission (FTC) has abandoned the Biden-era blanket ban but is now pursuing targeted, case-by-case enforcement against noncompetes it deems anticompetitive—with a particular focus on healthcare and life sciences. Warning letters have already been sent to employers in the sector.

State-by-state variation continues to widen. As of July 1, 2026, Virginia prohibits enforcement of noncompete agreements against any employee fired without “cause,” unless the employer provides severance or payment. Wyoming broadly voided most noncompetes entered after July 2025. Florida moved in the opposite direction with its employer-friendly Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act. Several states have also imposed healthcare-specific restrictions, including shortened permissible durations and outright voids of physician noncompetes.

Meanwhile, employee leaks account for an estimated two-thirds or more of trade secret theft incidents in the life sciences sector. Strong trade secret protection protocols—including robust onboarding and offboarding procedures—are essential complements to any restrictive covenant strategy.

2. Auditing Job Postings and Pay Structures for Transparency Compliance

Pay transparency is no longer a fringe requirement—it is now the law in a growing number of jurisdictions where life science employers compete for talent. For example, Illinois, Massachusetts, Minnesota, New Jersey, and Vermont have each enacted salary range disclosure requirements for job postings, with varying thresholds, timing rules, and content mandates. And other jurisdictions have adjusted their requirements over time. California has updated its definition of “pay scale,” broadened the definition of “wages” for equal pay analysis, and extended the statute of limitations on equal pay claims. New York City now requires large private employers to submit annual pay-data reports for use in citywide equity studies. And, regardless of the legal requirements, today’s workforce—and particularly younger workers— expect pay transparency.

For multistate employers—which describes most life science companies—the patchwork of various laws and regulations is a compliance minefield. A single job posting distributed nationally may trigger obligations under multiple state regimes simultaneously. As such, getting it right is critical. Separately, employers may want to review their internal compensation structures for equal pay exposure. Courts and agencies are scrutinizing pay disparities along race, sex, and other protected characteristic lines with renewed intensity.

3. Assessing AI Tools for Bias and Regulatory Compliance

Life science employers increasingly rely on AI tools for recruitment, workforce management, and employment decisions. While such tools may enhance efficiency, their use places them squarely in the crosshairs of a rapidly expanding state-level AI regulatory framework.

California, Colorado, Illinois, Texas, Virginia, and New York City have enacted laws, finalized regulations, or provided other standards targeting AI-related discrimination in employment. California’s Civil Rights Department has implemented regulations expressly prohibiting the use of automated decision-making software that discriminates. Proposed legislation in several additional states would regulate workplace surveillance tools, ban AI-based sole decision-making in discipline and termination, and require notice to applicants before AI tools are used.

Critically, plaintiffs’ attorneys are now using the absence of an AI bias audit as evidence of negligence or discriminatory design. Conducting and documenting such audits is rapidly becoming a minimum standard of care.

4. Refreshing Immigration Compliance Protocols

Life science companies are uniquely dependent on foreign national talent, and 2026 brings major changes to the H-1B program and immigration enforcement that demand proactive attention.

The U.S. Department of Homeland Security (DHS) is replacing the current random H-1B lottery with a wage-weighted selection system that prioritizes higher-salary positions—potentially disadvantaging startups and entry-level specialty roles. A new $100,000 fee applies to certain H-1B petitions filed for beneficiaries located outside the United States. Increased site visits from U.S. Citizenship and Immigration Services’ Fraud Detection and National Security Directorate, more intensive security vetting, and shorter employment authorization document (EAD) validity periods are all very likely.

Beyond H-1B, employers may want to ensure their Form I-9 compliance programs are airtight. Increased enforcement, including worksite investigations and audits, makes this a particularly high-risk area for organizations that have not focused on key I-9 processes.

5. Reviewing DEI Programs in Light of New Legal Standards

Diversity, equity, and inclusion (DEI) programs that were accepted practice just a few years ago now face significant legal exposure. Life science employers—many of which have invested heavily in DEI infrastructure—need to carefully examine those in light of these developments. President Donald Trump’s Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” requires federal contractors and grantees to certify they do not operate any “illegal” DEI programs. That requirement exposes such contractors (many of which are life science employers) to False Claims Act liability, so compliance is critical.

Further, the Supreme Court of the United States’ unanimous decision in Ames v. Ohio Department of Youth Services eliminated a heightened burden for majority-group plaintiffs in Title VII of the Civil Rights Act of 1964 cases, opening the door to discrimination claims from a broader range of employees. The U.S. Equal Employment Opportunity Commission (EEOC) has published guidance associating certain DEI practices with potential Title VII violations and is actively soliciting charges from individuals who believe they have been harmed by DEI programs.

This does not mean DEI programs must be abandoned. But it does mean that employers may want to ensure that these programs are carefully designed to be facially neutral in their application, consistently implemented, and thoroughly documented.

6. Revisiting Labor Relations Policies as the NLRB Resets

The National Labor Relations Board (NLRB) has been reconstituted with new Republican members and a new general counsel, and the reconstituted Board is expected to walk back several significant Biden-era precedents. Life science employers should understand what is changing and update their workplace policies accordingly.

Among the expected reversals or limitations: the Cemex bargaining order doctrine, the expanded Thryv, Inc., remedies framework, and the Stericycle standard for evaluating workplace rules, as well as potentially the McLaren Macomb standards for severance agreements. The Board has already reinstated the more employer-friendly 2020 joint-employer standard. General Counsel Crystal Carey has issued directives calling for less aggressive enforcement.

The practical implication for employers is a window to revisit handbook policies, conduct policies, and arbitration agreements that may have been drafted defensively to comply with more expansive Biden-era standards. The current partisan balance on the Board may slow some changes, so employers should not assume an immediate and full rollback of all Biden-era rules, but President Trump’s recent nominees, if confirmed, may ultimately result in more substantial changes.

7. Preparing for OSHA’s Heat Standard and Laboratory Safety Updates

Workplace safety remains a perennial compliance area for life science employers given the inherent hazards of laboratory, manufacturing, and clinical environments—and 2026 adds new layers.

In April 2026, the federal Occupational Safety and Health Administration (OSHA) renewed its national emphasis program on outdoor and indoor heat-related hazards. And OSHA’s proposed federal heat injury and illness prevention standard, which would create a permanent federal standard for heat injury and illness prevention that would apply across all industry sectors, is progressing through rulemaking. OSHA has signaled it may revise the proposal to be more performance-based, but a final rule is expected—and is likely to face legal challenge.

For life science employers, the heat standard is only one piece of the safety picture. Laboratory chemical exposure, biological hazards, and clinical environment risks all require ongoing attention, regardless of administration priorities. Employers may want to consider conducting a fresh risk assessment for all laboratory, manufacturing, and clinical environments, and reviewing heat illness prevention plans with an eye toward compliance with the anticipated OSHA standards.

8. Updating Leave, Accommodation, and Repayment Agreement Policies

A wide-ranging set of state mandates on leave, workplace accommodation, and training repayment agreements is taking effect or expanding in 2026, and life science employers operating in multiple jurisdictions face a significant administrative burden.

By mid-2026, nearly one-third of all states will enforce some form of mandatory paid family and medical leave. Courts are increasingly recognizing mental health conditions as ADA-protected disabilities, driving a rise in accommodation requests for flexible scheduling, modified supervision, and remote work arrangements. Several states and localities have enacted or proposed legislation requiring accommodations for menopause-related conditions—a new frontier in accommodation law. These new changes suggest life science employers take another look at their paid leave policies for compliance with new state mandates, as well as accommodation processes for mental health issues.

On the training repayment side, “stay-or-pay” provisions—where employees are required to repay training costs if they leave within a specified period—are being sharply curtailed in California and New York, as well as several other states. Life science employers that rely on these agreements to protect investments in employee development may want to review their current provisions for enforceability.

9. Investing in Employee Well-Being and Workforce Development

Beyond specific legal mandates, life science employers may want to use this spring as an opportunity to assess the broader health of their workforce programs. The rapid pace of innovation in the industry—driven by AI, automation, and biotechnology—means that employee skills can become outdated quickly, and a workforce that is not continuously developed is a competitive liability. Moreover, mental health resources, wellness programs, and a culture that supports open conversation about well-being are not merely nice-to-haves. Not only can they help create a happier and more satisfied workforce, but they also reduce absenteeism, improve retention, and increasingly serve as a differentiator in recruiting specialized talent in a competitive market. Accordingly, employers may want to assess their workforce training programs as well as the health and wellness programs to close gaps.

Conclusion: A Cleaner Compliance House

The employment and labor law landscape for life science employers in 2026 is not just complex—it is moving fast in multiple directions at once. Federal enforcement priorities are shifting under the Trump administration, while state-level regulation is accelerating across multiple compliance layers. Waiting for the dust to settle is not a viable strategy.

The good news is that a disciplined spring cleaning approach—prioritizing and working systematically through each of these areas—can meaningfully reduce legal exposure while also strengthening the organization’s operational and cultural foundations. Employers that prioritize proactive auditing, clear documentation, and regular policy review will be far better positioned than those that react only when problems arise.

Ogletree Deakins’ Life Sciences Industry Group will continue to monitor developments and will post updates on the Cybersecurity and Privacy, Diversity, Equity, and Inclusion Compliance, Employee Benefits and Executive Compensation, Employee Engagement, Employment Law, Immigration, Leaves of Absence, Multistate Compliance, Pay Equity, State Developments, Technology, Traditional Labor Relations, Unfair Competition and Trade Secrets, and Workplace Safety and Health blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal covers legal developments (federal, state, District of Columbia, and major locality) in Pay Transparency, Heat Illness Prevention and Wildfire Smoke Exposure, Leaves (including Family and Medical), Disability Accommodation, Protected Characteristics, Pregnancy, Childbirth, and Lactation, and E-Verify Requirements. Snapshots and updates are available to all registered client users. Premium and Advanced subscribers have access to detailed law summaries, template forms and policies, and step-by-step guides (e.g., Disability Accommodation Requests Task). For more information on the Client Portal or for a Client Portal Subscription, please reach out to clientportal@ogletree.com.

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Quick Hits

• California’s AB 2064 would add “criminal history” as a new protected characteristic under both the Unruh Civil Rights Act and FEHA.
• Employers would retain the ability to consider criminal history through an individualized assessment under the Fair Chance Act, but would be required to demonstrate that the conviction directly and adversely relates to specific job duties before denying employment.
• The bill builds on California’s existing Fair Chance Act framework rather than replacing it, and if enacted would significantly expand employer obligations around criminal history inquiries across employment, housing, and business accommodation contexts.

What the Bill Would Do

At its core, AB 2064, which was introduced by Assembly Member La-Shae Sharp-Collins (D-San Diego) and amended on April 6, 2026, would amend two foundational California civil rights statutes to prohibit discrimination based on a person’s criminal history.

The bill would add “criminal history” to the Unruh Civil Rights Act’s list of protected characteristics—which currently includes sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, and immigration status. The bill defines “criminal history” for purposes of the Unruh Act to mean a documented record of criminal offenses for which a person has been arrested, charged, convicted, incarcerated, or referred to a pretrial or posttrial diversion program.

AB 2064 would also add “criminal history” to FEHA’s provisions on protected characteristics in employment and housing. The FEHA definition is broader than the Unruh Act definition: it encompasses any record of an individual’s involvement with the state or federal criminal legal system, including arrests, charges, convictions, records that have been sealed, pardoned, dismissed, expunged, statutorily eradicated, or set aside, as well as referrals to diversion programs and juvenile court adjudications or actions. It is not clear why the two definitions differ, and they might be harmonized in a later amendment.

A Critical Carve-Out for Employers

The bill would not eliminate an employer’s ability to consider criminal history altogether. Under the proposed amendments to Government Code Section 12940, an employer may still deny an applicant a position—or discharge a current employee—if the employer conducts an individualized assessment pursuant to the Fair Chance Act (Government Code Section 12952) and determines that the person’s criminal history directly and adversely relates to the specific duties of the job. An employer that reaches that conclusion would have to provide the applicant or employee with a written notice explaining its reasoning and allow at least five business days to respond before making a final decision. The bill also specifies that for disparate impact claims, an employer would have to demonstrate that its policy is either required by federal or state law, or is job-related and consistent with business necessity, and that the conviction history bears a direct and adverse relationship to the specific job duties.

How This Fits Into the Existing Framework

California already has substantial legal infrastructure governing the use of criminal history in employment decisions. The Fair Chance Act prohibits most employers with five or more employees from inquiring about conviction history before making a conditional offer of employment and requires an individualized assessment before rejecting an applicant based on a conviction. AB 2064 builds on top of that framework rather than replacing it. The bill expressly states that its criminal history provisions are in addition to those in Section 12952 and any other applicable law, and that local jurisdictions would not be limited from enacting additional protections.

Should AB 2064 advance and ultimately be signed into law, California employers would face meaningful new obligations—not just in hiring, but in how they handle criminal history inquiries across employment, housing, and business accommodation contexts.

Ogletree Deakins’ California offices and Employment Law Practice Group will continue to monitor AB 2064 as it progresses through the legislative process, and will provide updates on the Background Checks, California, and Employment Law blogs as additional information becomes available.

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Quick Hits

• The DOL’s AI Literacy Framework defines essential skills for effectively using and evaluating generative AI technologies in the workplace.
• The framework encourages employers to provide hands-on training to ensure all employees possess baseline AI literacy skills to engage with AI tools responsibly and effectively.
• The framework outlines foundational content areas and key principles for effective training, including experiential learning and the integration of complementary human skills alongside AI competencies.

On February 13, 2026, the U.S. Department of Labor’s Employment and Training Administration published Training and Employment Notice (TEN) 07-25, rolling out the DOL’s “Artificial Intelligence Literacy Framework.” The framework provides voluntary guidance “designed to encourage expanded AI literacy across the public workforce and education systems.” The framework establishes a working definition of AI literacy and identifies five foundational content areas and seven delivery principles intended to guide program design for AI education and training.

What Does ‘AI Literacy’ Mean?

The DOL defines AI literacy as “a foundational set of competencies that enable individuals to use and evaluate AI technologies responsibly, with a primary focus on generative AI, which is increasingly central to the modern workplace.” The framework identifies “generative AI,” (which is more broadly understood as a type of AI that creates new content such as text, images, or programing code) as “the most transformative and widespread application[] of AI” and what is typically meant when people refer to “AI.” Key to AI literacy is that workers have a “foundational level of knowledge and skill” that “serves as a baseline for engaging with AI tools in any job,” while noting that for some jobs, workers may need “specific AI skills” and a greater “depth of knowledge” or “proficiency.” (Emphasis in original).

What Is the Framework’s Purpose?

At the core of AI literacy and the framework is a recognition that “every worker will need baseline AI literacy skills to succeed, regardless of industry or occupation.” The DOL is specifically calling on employers to use the framework as a guidepost to prepare workers and new hires to use AI tools “responsibly and effectively,” including onboarding new hires, upskilling current employees, and ensuring managers can guide AI adoption.

The framework encourages employers to review their workflows and identify tasks where AI can “augment employee capabilities.”

“Employers can encourage simple hands-on practice built around common workplace tasks, provide staff with clear internal guidance on appropriate AI use, and identify roles that may require deeper proficiency,” the framework states.

The framework follows up on the White House’s July 2025 AI “Action Plan” seeking to remove regulations and other barriers to development of AI technology in the United States, and the president’s April 2025 Executive Order 14277, “Advancing Artificial Intelligence Education for American Youth,” which seeks to promote education and integration of AI in K-12, higher education, and workplaces.

What Are the Key Principles?

The framework outlines five foundational content areas that AI literacy programs should address, focused on: (1) Understanding AI Principles; (2) Exploring AI Uses; (3) Directing AI Effectively; (4) Evaluating AI Outputs; and (5) Using AI Responsibly.

To that end, the framework identifies seven delivery principles to guide employers, educational institutions, and other stakeholders in designing and implementing AI literacy training efforts:

1. Enable Experiential Learning—The framework states that AI literacy is “most effectively developed through direct, hands-on use,” such as interactive prompt exercises and live feedback loops, rather than abstract instruction.
2. Embed Learning in Context—According to the framework, training is more effective when aligned with a worker’s specific job, industry, or existing training program, such as registered apprenticeships or career and technical education (CTE) curricula.
3. Build Complementary Human Skills—The framework emphasizes that AI tools amplify human input, and training should demonstrate how AI augments skills like critical thinking, creativity, and domain expertise rather than replacing them.
4. Address Prerequisites to AI Literacy—The framework notes that AI literacy efforts require learners to have foundational access, including digital literacy skills, device access, and broadband connectivity, and that “[p]rograms should proactively identify and address these barriers.”
5. Create Pathways for Continued Learning—The framework positions foundational AI literacy as a “starting point” and encourages programs to establish routes for workers to pursue specialized training or transition into AI-related roles.
6. Prepare Enabling Roles—The framework states that managers, trainers, mentors, and career counselors supporting workers should themselves be equipped with AI knowledge through approaches like train-the-trainer models and manager upskilling.
7. Design for Agility—Because “AI technologies evolve at a pace unlike previous workplace tools,” the framework calls for built-in mechanisms for adaptation, including modular content design, continuous updates, and feedback-driven iteration.

Next Steps

The DOL’s AI Literacy framework illustrates the current administration’s approach to addressing the impact of AI on the workforce and labor markets, seeking to promote the adoption, use, and understanding of this emerging technology. While voluntary and not a mandate, the DOL’s framework encourages employers to embrace AI training and skill development. As such, employers may want to review their AI training programs and resources and consider implementing such programs for their employees and new hires with consideration to the framework’s outlined principles.

At the same time, the DOL acknowledges that the framework is a working document intended to evolve over time in response to rapidly changing technology, evolving labor dynamics, and stakeholder input. The DOL is welcoming feedback from employers and other stakeholders on effective AI literacy efforts, barriers to success, and opportunities for further guidance. Employers may want to consider taking the opportunity to provide feedback and influence future guidance on this issue.

Ogletree Deakins’ Technology Practice Group will continue to monitor developments and will provide updates on the Cybersecurity and Privacy, Employment Law, and Technology blogs as additional information becomes available.

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

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Quick Hits

• Several federal laws may require businesses to provide reasonable accommodations for employees seeking infertility treatments.
• A growing number of states have passed laws requiring health plans to cover infertility diagnosis and treatments.
• Fertility medications and procedures are not always covered by health insurance.

Leave Benefits

The Family and Medical Leave Act (FMLA) may apply to fertility treatments if they are needed to address a serious health condition requiring ongoing care from a physician. For example, an egg retrieval, in vitro fertilization, or procedure to treat endometriosis or uterine fibroids could be a serious health condition under the FMLA.

The FMLA entitles workers to twelve weeks of unpaid leave to care for their own serious illness, care for a family member’s serious illness, or bond with a child. Twelve states and Washington, D.C., have paid family and medical leave programs. The amount of leave and wage replacement benefits varies by state.

If a miscarriage or stillbirth happens, an employee may be entitled to take FMLA leave to obtain medical care or recover physically. Some employers allow employees to take bereavement leave after a miscarriage or stillbirth, even when it is not legally required.

Some states have new laws granting time off for reproductive losses. For example, California requires employers to provide five days of paid leave for employees after a miscarriage, stillbirth, failed surrogacy, failed adoption, or unsuccessful assisted reproduction procedure. The Illinois Family Bereavement Leave Act provides eligible employees up to two weeks of unpaid leave to grieve, make arrangements, or attend services for a stillbirth, miscarriage, unsuccessful reproductive procedure, failed adoption or surrogacy agreement, or diagnosis that negatively impacts pregnancy or fertility. New Jersey has a pending bill that would amend the New Jersey Family Leave Act to include “the death of a child or miscarriage or stillbirth of a child” and “time to grieve” in the definition of job-protected “family leave.”

Reasonable Accommodations

The Pregnant Workers Fairness Act (PWFA) requires employers with fifteen or more employees to provide reasonable accommodations for limitations related to pregnancy, childbirth, and related medical conditions, even if they do not fall within the definition of a “disability” under applicable statutes. Such conditions may include infertility, gestational diabetes, postpartum depression, lactation, and miscarriage. Typical accommodations under the PWFA include time off requested by the employee, remote work, light duty assignments, permission to sit, and permission to drink water at the workstation.

In addition, the Americans with Disabilities Act (ADA) applies to employers with fifteen or more employees and typically covers employees experiencing infertility because reproduction is considered a major life activity under the ADA. In addition, employees seeking fertility treatments may have related medical conditions that also qualify as disabilities under the ADA.

For employees with a known disability, employers are required to engage in an interactive process to determine the employee’s limitations and agree on reasonable accommodations if needed. For individuals undergoing fertility treatments, reasonable accommodations may include remote work, flexible schedules, time off to attend medical appointments, and permission to avoid heavy lifting.

Confidentiality

The FMLA, PWFA, and ADA require employers to keep employees’ medical information confidential, and such information may not be maintained in personnel files.

Health Insurance Coverage

Fertility treatments can be very expensive. Even when accommodations and leave benefits are available, that does not mean an employer’s health plan will cover the cost of fertility treatments. California, Colorado, Connecticut, Delaware, Washington, D.C., Illinois, Maryland, Massachusetts, Maine, New Hampshire, New Jersey, New York, Rhode Island, and Utah have laws that require certain health plans to cover in vitro fertilization or other fertility treatments. Twenty-one states have laws that require health plans to cover fertility preservation, such as egg freezing or sperm freezing, when necessary because of a medical intervention like surgery, chemotherapy, or radiation. In some cases, religious employers may be exempt from state mandates to cover fertility treatments.

Previously, infertility was defined by unsuccessful attempts to conceive through unprotected heterosexual intercourse. Thus, for some LGBTQ+ employees, a clinical infertility diagnosis was not available, and infertility treatments sometimes were not covered for that reason. In 2023, the American Society for Reproductive Medicine changed the definition of infertility to include the need for medical intervention, such as donor eggs or donor sperm, to attain pregnancy. That led to more health plans covering infertility treatments for LGBTQ+ patients.

Regardless of coverage, LGBTQ+ workers still may be entitled to take time off under the PWFA and the FMLA. In addition, Title VII of the Civil Rights Act of 1964 prohibits employment discrimination, harassment, and retaliation based on infertility, pregnancy, and childbirth. It applies equally to heterosexual and LGBTQ+ employees.

Next Steps

Employers may wish to review their written policies and train managers to comply with all local, state, and federal laws mandating time off, accommodations, and nondiscrimination. Many states have laws similar to the protections under the FMLA, ADA, and PWFA.

Employers may wish to carefully document the legitimate business reasons for denying any accommodation request related to fertility treatments, pregnancy, or childbirth.

Ogletree Deakins’ Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation, Employment Law, Healthcare, and Leaves of Absence blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on state family and medical leave laws and bereavement leave laws, as well as pregnancy accommodation laws. Premium-level subscribers have access to comprehensive law summaries and updated policies, as well as detailed step-by-step guidance and templates for handling Pregnancy Accommodation Requests. Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

Justine L. Abrams is a shareholder in Ogletree Deakins’ Morristown office.

Sheri L. Giger is a shareholder in Ogletree Deakins’ Pittsburgh office.

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

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Quick Hits

• The IRS has issued new guidance reflecting that the tax exclusion for educational assistance programs under Section 127 will be adjusted for inflation starting in 2027, while maintaining a flat cap of $5,250 for 2026.
• The guidance clarifies the permanent extension for tax-free employer contributions toward qualified education loans and clarifies that educator expenses can be claimed as itemized deductions starting in 2026.

The IRS updated its frequently asked questions (FAQs) related to educational assistance programs with the issuance of Fact Sheet 2026-10, which provides general guidance for taxpayers and tax professionals. The new fact sheet replaces a prior version issued in 2024 under the Biden administration.

Section 127 of the Internal Revenue Code allows taxpayers to exclude educational assistance benefits provided by their employers from their gross income if those benefits are provided under a qualifying educational assistance program. Under such programs, employers may provide tax-free educational assistance for tuition, fees, and similar expenses, books, supplies, equipment, and qualifying education loans. Payments may be applied to undergraduate or graduate coursework and do not have to apply to work-related courses.

Updates in the 2026 Fact Sheet

The new FAQs make three substantive changes compared to the FAQs released in 2024:

1. Cost-of-Living Adjustment to the $5,250 Exclusion

The 2024 fact sheet indicated that the exclusion for educational assistance benefits was capped at a flat $5,250, which was the statutory limit prior to the OBBBA. While that cap remains flat at $5,250 for 2026, the OBBBA states that the amount will be adjusted based on the IRS’s “cost-of-living adjustment” (COLA) rounded to the “nearest multiple of $50.” The new fact sheet indicates the $5,250 cap will be “adjusted for increases in the cost of living for taxable years beginning after 2026.” That means, for tax years 2025 and 2026, taxpayers may exclude up to $5,250 of employer-paid educational assistance, and employers cannot include those benefits in wages, tips, or other compensation shown in Box 1 of Form W-2, according to the fact sheet.

2. Permanent Extension of Qualified Education Loan Payments

The 2024 fact sheet stated that tax-free educational assistance benefits also include employer payments of qualified education loan principal and interest made “after March 27, 2020, and before January 1, 2026 (unless extended by future legislation).” The 2026 fact sheet removes the sunset date entirely, in accordance with the OBBBA, stating the benefit is simply available for payments beginning March 27, 2020, with no end date.

3. Educator Expense Itemized Deduction (Starting 2026)

The 2026 fact sheet clarifies that the educator expense deduction claimed on “Form 1040 Line 11” may be claimed as an itemized deduction. The new fact sheet adds the following language not included in the prior version: “Starting in 2026, educator expenses may also be deducted as itemized deductions.” The deduction allows K-12 teachers to deduct “costs like books, supplies, computer equipment and software, classroom equipment and supplementary materials used in the classroom.”

Next Steps

Employers may want to note the exclusion for employees for educational assistance benefits paid by employers, which allows employers to provide up to $5,250 per year in tax-free benefits to employees, and that the cap is set to change with the COLA beginning in 2027. Employers may want to consider such programs in structuring their compensation and benefits programs, including whether to review and amend programs implemented prior to the enactment of the OBBBA.

Ogletree Deakins’ Employment Tax Practice Group will continue to monitor developments and will provide updates on the Employee Benefits and Executive Compensation, Employment Tax, and Higher Education blogs as additional information becomes available.

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Quick Hits

• The California Court of Appeal held that an arbitrator’s finding of no Labor Code violations has issue-preclusive effect on an employee’s PAGA standing.
• The decision barred an employee from pursuing representative PAGA claims in court after losing on individual claims in arbitration.
• The ruling confirms a powerful strategy for employers: compel individual claims to arbitration, secure a favorable ruling, and then move to dismiss the representative PAGA action.

On March 3, 2026, in Sorokunov v. NetApp, Inc., the California Court of Appeal, First Appellate District held that, absent any Labor Code violations, which were dismissed in arbitration, the employee is no longer an “aggrieved employee,” and the employee’s representative PAGA claim cannot survive.

Background

Former NetApp employee Alexander Sorokunov sued the company, alleging various Labor Code violations related to his compensation and sought civil penalties under PAGA on behalf of himself and other affected employees.

The trial court granted NetApp’s motion to compel arbitration of Sorokunov’s individual (non-PAGA) claims but refused to stay the PAGA claim during the arbitration proceedings. The trial court confirmed the arbitration award and then granted NetApp’s motion for judgment on the pleadings on the PAGA claim, concluding that the arbitration award conclusively established that Sorokunov was not an “aggrieved employee” and thus lacked standing to pursue the PAGA cause of action.

On appeal, the First Appellate District upheld the trial court and rejected Sorokunov’s arguments that the trial court had erred by compelling arbitration, denying summary adjudication on his PAGA claim, confirming the award, and applying issue preclusion to bar PAGA standing.

Issue Preclusion Barred the PAGA Claim

The most significant portion of the ruling addressed whether the arbitration award barred the employee’s PAGA claim through issue preclusion—a doctrine that prevents relitigating issues between parties in privity that are identical to issues that have been “actually litigated” on the merits in a prior proceeding.

Issue Preclusion Applies

Sorokunov argued that issue preclusion cannot be applied because the parties were not the same or in privity, because a PAGA claim is an action prosecuted on behalf of the state. The court rejected this, holding that while preclusion barred Sorokunov personally from prosecuting a PAGA action, it had no effect on the California Labor and Workforce Development Agency’s (LWDA), i.e., the state’s, ability to investigate and prosecute the same violations, nor would it prevent other NetApp employees from asserting their own claims.

Sorokunov also argued the issues were not identical, characterizing the PAGA case as involving broader employer “practices.” The court was not persuaded, explaining that “to the extent [Sorokunov’s] PAGA standing is dependent on having suffered the same Labor Code violations that have been adjudicated in arbitration, his standing and the underlying violations are considered identical issues.” Once a confirmed award establishes that an employee did not experience the alleged violations, he is no longer an “aggrieved employee” with PAGA standing.

Arbitration Award Had Preclusive Effect

The appellate court further held that an arbitrator’s findings that no Labor Code violations occurred were preclusive on the question of the employee’s PAGA standing. The court stated: “[t]he arbitrator determined both as a matter of fact and law that [the employee] had not suffered any of the alleged Labor Code violations and,  … we agree with that conclusion. The trial court did not err in finding that the arbitrator’s findings were subject to issue preclusion. Nor did the trial court err by relying on those conclusive findings to determine that [the employee] was not an aggrieved employee” or find that he lacked standing.

Policy Arguments Rejected

Finally, the appellate court rejected policy arguments against applying issue preclusion, including the concern that doing so would eliminate the state’s enforcement interest because PAGA claims may be time-barred before a replacement plaintiff or the LWDA can act. The court noted that the LWDA receives notice of every PAGA claim at the outset, retains the ability to investigate on its own timeline, and is not bound by the arbitration award.  

Key Takeaways

Sorokunov confirms a powerful strategic sequence for California employers: compel individual claims to arbitration, win on the merits, and use that result to end the companion representative PAGA action. For companies facing PAGA claims, the individual arbitration is not merely a procedural formality—it is the main event. Key takeaways include:

• Arbitration agreements remain a powerful tool for managing PAGA exposure. When an employee’s individual Labor Code claims are resolved in the employer’s favor through arbitration, the employee may lose standing to pursue representative PAGA claims based on those same alleged violations. This makes well-drafted arbitration agreements an increasingly critical component of employer litigation strategy in California.
• Individual arbitration can be a PAGA defense. After Sorokunov, employers may want to consider approaching the individual arbitration with an understanding that the findings may serve as the basis for a dispositive motion on the PAGA claim.
• Preclusion likely only applies to substantive arbitration ruling, not procedural ruling. Issue preclusion requires that the violations were “actually litigated” and “necessarily decided.” Thus, an arbitrator who dismisses on procedural grounds may not generate the preclusive finding needed to defeat a representative PAGA claim.

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

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