Checking in on DHS. Uncertainty continues to reign at the U.S. Department of Homeland Security (DHS), as the agency remains shuttered and unable to fund operations after Congress failed to pass funding legislation by the most recent deadline of February 13, 2026. News outlets are reporting long security lines at multiple airports in the United States, as some Transportation Security Administration (TSA) agents—who are DHS employees required to serve the public, even when their pay is delayed or held in abeyance—miss work due to frustration or pursuit of other means to pay their bills. Airport lines are likely to worsen as TSA agents missed their first paychecks this week and travel volume continued to increase around schools’ spring breaks. Multiple votes on funding bills failed in the U.S. Senate this week, and the sides do not appear close to reaching a deal.

Second, the U.S. Senate Committee on Homeland Security and Governmental Affairs has scheduled a March 18, 2026, hearing on the nomination of Senator Markwayne Mullin (R-OK) to be secretary of homeland security. The hearing will occur less than two weeks after President Donald Trump announced Senator Mullin’s nomination. The sometimes arduous and lengthy nomination process clearly moves much more quickly when the Senate is confirming one of its own.

Court of Appeals Rejects NLRB’s New Bargaining Order Standard. In a 2–1 decision issued on March 6, 2026, the U.S. Court of Appeals for the Sixth Circuit struck down a 2023 National Labor Relations Board (NLRB) decision that established a new precedent for issuing bargaining orders when setting aside elections due to employer misconduct. The court’s decision focuses on the authority Congress bestowed on the NLRB to make federal labor policy via rulemaking or through adjudication of specific disputes that may serve as precedent for future adjudications.

According to the court, when the Board makes policy through adjudication, “the agency must derive the standard from a case-specific need to resolve the parties’ dispute.” In its 2023 decision, however, the Board created a new bargaining standard that was unnecessary to resolve the parties’ dispute and was, therefore, “rulemaking under the guise of an adjudication.”

Because the “Board must announce such policies in the Federal Register, not an adjudication,” the court invalidated the 2023 case as an unlawful exercise of the Board’s adjudicative authority. Due to the Board’s doctrine of nonacquiescence, the decision applies only to cases that arise in the Sixth Circuit, but its reasoning may be influential beyond those borders and shape Board policy decisions in the future. Christine M. Flack and Zachary V. Zagger have the details.

Republican Senators to Labor Secretary: OSHA Heat Proposal Is Flawed. In a letter dated March 11, 2026, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Bill Cassidy (R-LA) and fifteen other Republican senators notified Secretary of Labor Lori Chavez-DeRemer of their concerns regarding the Occupational Safety and Health Administration’s (OSHA) proposed heat injury and illness prevention standard. The letter urges Secretary DeRemer to “consider how to center worker safety in the ongoing discussion regarding pragmatic solutions for preventing heat-related hazards in the workplaces.” The letter raises specific concerns about the proposal’s provisions relating to heat triggers, acclimatization requirements, the written safety plan, the heat safety coordinator, and other issues.

Unlike many regulatory proposals issued by the Biden administration, the heat standard proposal has not been scrapped by the current U.S. Department of Labor (DOL). In fact, the DOL held public hearings on the proposal in the summer of 2025. But what happens next is hard to predict. As the Buzz has discussed, with the most recent regulatory agenda having been issued way back in September 2025, the regulated community is in the dark about the administration’s current regulatory timetable. Worse, the September 2025 agenda did not provide any entry for the heat proposal’s next regulatory step.

House Dems Forecast Employment-Related AI Legislative Agenda. As reported in the Buzz, Republican leaders on the House Education and Workforce Committee have been conducting a series of hearings on artificial intelligence (AI) in the workplace. Not to be outdone, the four Democratic co-chairs of the House Labor Caucus sent a letter this week to their colleagues on the House Democratic Commission on AI & The Innovation Economy, outlining their vision for what should be included in a “policy framework for regulation and innovation in AI.” First, the letter encourages policies that make it easier for workers to organize in order “to prevent the use of AI as a weapon to undermine worker power.” The letter also argues for legislation that mandates “transparency and accountability for AI use” and opposes any federal framework that would preempt state and local laws or regulations. Should Democrats take over the Senate and/or House after the midterm elections in November 2026, these AI-related talking points are likely to feature prominently in their legislative agenda for the 120th Congress.

House Legislators Get Their Motors Runnin’. Last week, the U.S. House of Representatives passed H.R. 4386, the “America the Beautiful Motorcycle Fairness Act.” If enacted as proposed, the legislation would amend the Federal Lands Recreation Enhancement Act to allow motorcyclists holding a National Parks and Federal Recreational Lands Pass fair access to national parks and other federal recreation sites. Currently, the pass covers the entrance of only one motorcyclist and any passengers. But under the legislation, the pass would cover an additional motorcyclist (including his or her passengers) who accompanies the passholder. In short, the bill allows two motorcyclists traveling together to use one pass. Representative Tim Walberg (R-MI)—who co-chairs the bipartisan Congressional Motorcycle Caucus—championed the bill in the House. Representative Walberg will now be calling on Motorcycle Caucus leaders in the U.S. Senate—Senators Joni Ernst (R-IA) and Gary Peters (D-MI)—to rev up their legislative efforts and get the legislation across the finish line.

Quick Hits

• A New Jersey federal court granted a request to transfer venue in an age discrimination lawsuit involving a remote employee, transferring the lawsuit to a federal court in a district where the employer was located.
• The court determined that venue was appropriate where the employer is headquartered and where the alleged discriminatory decisions were made, rather than where the employee resides, and emphasized that litigation convenience weighed in favor of the employer’s home venue.
• This ruling highlights that having remote employees in a state does not automatically open an employer up to litigation in that state.

On March 3, 2026, the U.S. District Court of New Jersey, in Papa v. IAT Insurance Group, Inc., granted an employer’s motion to transfer venue to the Eastern District of North Carolina, ruling that the question of proper venue for such claims turns on where the alleged discriminatory decisions were made, not where the employee feels their effects.

Factual Background

The lawsuit involved claims brought by a New Jersey resident, Rosemarie Papa, who was hired for a remote position at IAT Insurance Group in April 2018. According to the ruling, she worked mostly from her home in Cherry Hill, New Jersey, conducting training and meetings virtually. Part of her role required her to travel to states outside New Jersey, including North Carolina, Connecticut, Missouri, and Illinois, and she traveled to IAT’s headquarters in North Carolina approximately a dozen times in her last two years of employment.

The remote employee alleged she faced discrimination and retaliation during her employment, including during virtual meetings with a supervisor who worked in Illinois and with human resources officers in North Carolina. In 2023, when she needed to take a medical leave of absence, the employer only allowed her to take unpaid leave and replaced her.

She filed a lawsuit in the District of New Jersey, alleging claims under the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act, and the New Jersey Law Against Discrimination (NJLAD). The employer then filed a motion to transfer venue to the Eastern District of North Carolina.

Factors Weigh in Favor of Transfer

The District Court of New Jersey ruled that both private- and public-interest factors weighed in favor of a transfer of venue. The court emphasized that in employment discrimination cases involving remote employees, the state where the employee is located is not dispositive. Instead, courts will look to where the discriminatory decisions were made, not where the employee felt their effects. Even though the employee in the case “performed remote work from New Jersey and was present in New Jersey during most of the alleged discriminatory actions,” the “decisions underlying her claims were made by IAT personnel located outside of New Jersey, primarily in North Carolina,” the court stated.

The court explained that, unlike another New Jersey remote employee case denying a request to transfer venue, the employee’s role in this case was not “explicitly tied to developing the New Jersey market.” It did not involve “extensive work in the state.” In her role, the employee traveled outside New Jersey and the work did not pertain directly to the state.

Additionally, the court found that convenience weighed in favor of a transfer to the Eastern District of North Carolina. The court stated that “the cost and burden of transporting multiple defense witnesses to New Jersey would considerably outweigh the cost and burden of Plaintiff and, if needed, Plaintiff’s current counsel traveling to North Carolina.”

Finally, while the court noted that New Jersey has an interest in protecting its citizens, North Carolina has an interest in adjudicating claims arising from employment decisions made by corporations within its borders. The court emphasized that the employee could more easily travel to North Carolina and had not raised any issue with obtaining counsel in North Carolina. Further, the court said, “while this Court may generally have greater familiarity with the NJLAD, there is nothing novel about its provisions; indeed, it essentially mirrors federal law in most respects.”

Key Takeaways

• Location of Discriminatory Decisions—The grant of transfer of venue reinforces that the location where employment decisions are made is a significant factor in determining whether transfer of venue is appropriate in cases involving remote employees. Even though the remote employee in the case lived in New Jersey and performed most of her work from her home in the state, the court focused on the fact that the company headquarters, where the alleged discriminatory decisions were made, is located in North Carolina.
• Location of Remote Employees—The ruling suggests that having remote employees in New Jersey will not automatically subject employers to litigation in the state’s courts. The court found it significant that the remote employee’s work was not specifically tied to the state.
• Nature of the Role—In evaluating proper venue, the nature of the specific role of the remote employee is significant. In this case, the court noted that the employee’s role was not “explicitly tied” to New Jersey or developing the New Jersey market. The court cited precedent that communications from New Jersey were “insufficient to anchor venue when the relevant employment decisions took place” elsewhere.

Ogletree Deakins’ Morristown office will continue to monitor developments and will provide updates on the Employment Law, Leaves of Absence, Multistate Compliance, New Jersey, and Return to Work blogs as additional information becomes available.

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Quick Hits

• Washington’s state legislature passed a bill to ban noncompetition covenants in the state and prohibit employers from seeking to enforce them on or after June 30, 2027.
• Employers would need to “make reasonable efforts to provide written notice” to employees and former employees with active noncompetition covenants that those covenants are void and unenforceable.
• The law would still allow narrowly drafted nonsolicitation agreements, confidentiality agreements, and covenants not to use or disclose trade secrets.

On March 9, 2026, the Washington State House of Representatives concurred with the Senate’s amendments to Substitute House Bill (SHB) 1155. While Washington law already restricts noncompete agreements, including limiting them to high-earning employees, SHB 1155 would ban all employment-based and independent-contractor–based noncompete agreements.

If signed into law by Governor Bob Ferguson, Washington would join the short but growing list of states that ban or restrict noncompete agreements in employment.

Banning ‘Noncompetition Covenants’

SHB 1155 declares that, effective June 30, 2027, “all noncompetition covenants are void and unenforceable regardless of when the parties entered into the noncompetition covenant.” The bill would further prohibit employers from “enforc[ing], attempt[ing] to enforce, or threaten[ing] to enforce against an employee or worker any noncompetition covenant” or “enter[ing] into or attempt[ing] to enter into a noncompetition covenant with an employee or worker.”

The bill would expand the definition of “noncompetition covenant” to an agreement “that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind.” (Emphasis added.)

The ban on employment-based noncompetition agreements would also apply to any provision in an agreement that would require an employee, as a consequence of “engaging in lawful profession, trade, or business,” to “return, repay, or forfeit any right, benefit, or compensation.” Thus, for example, any provision of a stock option or other equity compensation agreement that required the individual to forfeit such stock options or other equity compensation as a consequence of engaging in postemployment competition with the employer would be unenforceable.

Although SHB 1155 allows for noncompete agreements in connection with the purchase or sale of a business, such agreements would be enforceable only against individuals who acquire or “dispose[] of an ownership interest representing one percent or more of the business.” Other restrictions on competition in hiring or that restrain trade could be considered contracts of adhesion and found unreasonable; such restrictions would be construed liberally, and the exceptions construed narrowly.

Notice Requirements

By October 1, 2027, employers would need to “make reasonable efforts to provide written notice” that an applicable noncompetition covenant is void and unenforceable to any:

• current employee;
• former employee under the effective period of such an agreement; and
• independent contractor, “whose noncompetition covenant is still within its effective time period,” who was required to enter into a noncompetition covenant or contract that included such a provision.

Exclusions

The ban would not apply to all restrictive covenants. Specifically, the definition of prohibited “noncompetition covenants” would not include: nonsolicitation agreements; confidentiality agreements; covenants prohibiting the use or disclosure of trade secrets; covenants restricting the acquisition or disposal of an ownership interest in connection with the sale or acquisition of more than one percent of the business; covenants for franchisees; or “an agreement to pay for education expenses between an employer and a current or potential employee.”

Nonsolicitation Agreements

Although SHB 1155 would not prohibit nonsolicitation agreements—i.e., “an agreement between an employer and employee that prohibits solicitation by an employee, upon termination of employment … [o]f any employee of the employer to leave the employer[,] or … of any current or prospective customer, patient, or client of the employer”—the bill would require “the definition of nonsolicitation agreement [to] be narrowly construed.”

Specifically, a permissible “nonsolicitation agreement” would be one limited in duration to no more than eighteen months that prohibits the active solicitation of the employer’s current or prospective customer, patient, or client by a former employee who had “established or substantially developed a direct relationship with the customer, patient, client, or prospect through the employee’s work for the employer”—not a nonsolicitation agreement whose restrictions only “directly or indirectly” prohibit the former employee from accepting or transacting business with a customer, patient, client, or prospect of the employer.

Effective Date

If SHB 1155 is enacted as proposed, the Washington State Senate’s amendments would set the law’s effective date to June 30, 2027. Any legal proceedings commenced before that date would be governed by the statute as amended prior to the effective date.

Next Steps

SHB 1155 now moves to Washington’s governor for approval. If signed into law, the legislation would make Washington the latest state in a growing constellation of states that restrict noncompete agreements and other restrictive covenants in the employment context because of their perceived detriment to worker mobility and higher wages.

California has banned most employment-based noncompete agreements for more than one hundred years. More recently, North Dakota, Oklahoma, and Minnesota have done the same. Other states, including Colorado, Illinois, Maine, Maryland, Oregon, Rhode Island, and Virginia, have substantially restricted the use of such agreements for employees who do not meet minimum income and/or other requirements. Employers—especially multistate employers—should take care to monitor developments in these and other states.

In addition, employers in Washington State should note that while noncompetition covenants will be unenforceable, other properly drafted employment provisions protecting employer trade secrets, confidential information, and current employees, customers, patients, clients, and prospects from interference and poaching would remain enforceable, if narrowly drafted.

Employers in Washington State may want to review their current use of noncompete agreements and other restrictive covenants and prepare for compliance with SHB 1155.

Ogletree Deakins’ Seattle office and Unfair Competition and Trade Secrets Practice Group will continue to monitor developments and will provide updates on the Healthcare, Hospitality, Multistate Compliance, Sports and Entertainment, Unfair Competition and Trade Secrets, and Washington blogs as additional information becomes available.

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The Federal Acquisition Regulation (FAR) is moving away from highly prescriptive, checklist-driven rules toward a more principles-based framework that emphasizes judgment and discretion and necessitates well-developed internal controls. The FAR overhaul’s stated goal is to streamline acquisitions, reduce non-statutory burdens, and expand competition, especially for smaller vendors. For contractors, this shift places greater importance on disciplined risk management—and the most resilient approach is a proactive compliance framework that integrates procurement, employment, and operational practices to manage regulatory exposure holistically.

Quick Hits

• The FAR overhaul is shifting federal procurement from prescriptive regulatory procedures to a principles-based framework that relies more heavily on contractor judgment and internal controls.
• Compliance risk will increasingly turn on how contractors interpret statutory requirements and document their decision processes, rather than whether they followed a detailed FAR checklist.
• Contractors should strengthen internal compliance processes, particularly in areas such as wage determinations, labor classifications, and sourcing, to ensure decisions are reasoned, documented, and defensible.

From Procedural Compliance to Outcome-Based Accountability: The Importance of Internal Controls in Mitigating Risk

The FAR’s changing compliance landscape from prescriptive rules to judgment-based compliance requires contractors to develop integrated and robust internal decision-making controls.

The changes to the FAR provisions governing wage determinations under the Davis-Bacon Act (DBA) highlight the risks posed by the FAR overhaul. The FAR’s new framework will tie DBA wage determinations more directly to U.S. Department of Labor (DOL) guidance and contracting officer judgment, rather than to codified checklists and procedures. Currently spanning seven sections and thirty-one clauses, FAR Subpart 22.4, “Labor Standards for Contracts Involving Construction,” contains detailed procedural instructions directing contracting officers on how to select and apply construction wage determinations to contracts. These provisions walk contracting officers through step-by-step processes, such as selecting the appropriate wage determination type (i.e., building, residential, highway, or heavy construction), determining whether to use a general wage determination or a project wage determination, correcting an incorrect wage determination before award, and handling unknown places of performance.

Much of this procedural material is being removed from the regulatory text. The current revision of FAR Subpart 22.4 announced at FAR Overhaul – Part 22 | Acquisition.GOV shows the subpart reduced to four sections and seven clauses. In those few provisions, wage determination responsibility moves to the DOL’s regulations (29 C.F.R. Parts 1 and 5) and to guidance implementing the DBA, such as SAM.gov wage determination tools, the DOL’s electronic e98 request system, and Strategic Acquisition Guidance/buying guides published on Acquisition.gov.

Under this streamlined structure, the FAR itself will retain only core statutory requirements, while contracting officers are expected to apply the DOL’s Wage and Hour Division guidance and tools to determine how to select the appropriate determination.

For example, under the current subpart, contracting officers are instructed to either use a wage determination posted on SAM.gov or request that the DOL issue a new determination, and the subpart provides guidance on selecting the appropriate wage determination. (See FAR 22.402-2 and 22.402-3.)

Under the proposed revision to 22.402-3, contracting officers must use a wage determination posted on SAM.gov, are not provided guidance on selecting the appropriate determination, and may seek DOL assistance only if no wage determination has been issued for the contract work. (See Revised 22.402-3, “Construction Wage Rate Requirements statute.”) The change may appear subtle; however, instructing contracting officers not to seek the DOL’s assistance unless a wage determination is unavailable on SAM.gov could result in more contracting officers selecting wage determinations for contracts that may not clearly be correct, rather than seeking needed clarifications from the DOL regarding applicability.

For contractors, this difference matters because it underscores the importance of understanding DOL wage determination rules and requirements directly, as simply following the FAR’s procedural road map is no longer an available compliance approach. Contractors will need to independently evaluate prevailing wage determinations, labor category mapping, and reclassification requests through structured internal methodologies to mitigate risks posed by a judgment-based compliance regime.

Proactive Compliance Structuring as a Best Practice

Contractors that have depended on FAR procedural scaffolding, particularly those focused solely on federal work, should consider internal process modernization to mitigate the new risk landscape. Risk is shifting from technical noncompliance to judgment calls about substantive legal requirements that must withstand scrutiny by auditors, inspectors general, and enforcement agencies. In addition to wage determinations, the FAR overhaul presents compliance risk in areas such as labor category alignment, pricing and cost allowability, domestic sourcing analyses, and equal employment opportunity program design. All of these are important to consider holistically when assessing the strength of internal controls in this changing regulatory environment. In addition, deference to agency determinations is narrowing under evolving administrative law and shifting compliance away from reliance on contracting officer directions. Repeatable, auditable decision-making processes that address compliance questions in real time will likely be a best practice.

Next Steps

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

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

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The Board’s long history of decisional flip-flopping appears to be finally catching up with the agency as its credibility with some stakeholders and reviewing courts has dropped in recent years. So much so that in some states (the usual suspects), there are efforts to replace the national structure with a state-specific version.

The agency also faces a host of consequential legal challenges to its structure, procedures, and remedial authority. While a quorum has finally been restored after a nearly year-long hiatus, the Board still lacks the three-vote majority, which, by past practice, has been required to overturn much of the ill-advised precedent issued in the last few years.

Debate over the necessity and scope of all forms of federal regulation is as old as the existence of administrative law itself. The regulation of labor/management relations is no exception. At present, however, that debate is wholly academic since there is no realistic or viable alternative on the horizon. While there’s no shortage of “reform” proposals, they are either too extreme to garner widespread support or too impractical to enable implementation.

Consequently, the NLRB and National Labor Relations Act, despite their flaws and problems, remain the only show in town. That reality should cause all stakeholders to wish the Board’s new general counsel and board members well, as they at least try to correct the missteps of the Board’s own making. 

We hope you will enjoy this issue of the Practical NLRB Advisor on the latest developments at the NLRB. We will issue the next edition in the coming months. Please let us know if you have any questions.

Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor developments and will provide updates on the Traditional Labor Relations blog.

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Quick Hits

• DV-2027 entrants must provide valid passport information and upload scans of the biographic and signature pages with their entry form.
• A $1 registration fee is required, with no waivers.
• The changes aim to combat fraud and improve the integrity of the program.

The State Department’s final rule takes effect on April 10, 2026. Applicants for the DV-2027 lottery will be required to submit a scan of the biographic and signature page of a valid passport when completing the electronic entry. There are limited exemptions to the passport requirement for stateless individuals, nationals of Communist-controlled countries who are unable to obtain a passport from their government, and individuals who are beneficiaries of an approved waiver. This change is being made to combat fraud.

Additionally, all entrants must pay a $1 registration fee at the time of submitting their entry online. No waivers will be available for this nominal fee. The rule also replaces “gender” with “sex” on the entry form pursuant to Executive Order 14168, and replaces “age” with “date of birth” to improve accuracy.

To accommodate these new requirements, the State Department is deferring the opening of the DV-2027 entry period to give prospective entrants additional time to obtain passports.

Entrants may check their selection status by visiting the official Entrant Status Check webpage and entering their entry confirmation number, last name, and date of birth. The State Department exclusively uses this method to inform entrants of their selection status; notifications are not sent through email, mail, or phone. The selection notice on the webpage will be accessible until September 30 of the applicable fiscal year.

Next Steps

Applicants may prepare for entry in the DV-2027 lottery by taking the following steps:

• Obtain a passport.
• Budget ninety minutes for registration.
• Prepare a payment method for the $1 registration fee.
• Review official instructions on the State Department website.
• Submit an entry electronically on the Entrant Status Check website once the DV-2027 period is announced.

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 Bruce v. Adams and Reese, LLP, a former employee sued a law firm for disability discrimination, retaliation, sexual harassment, and hostile work environment.
• The Sixth Circuit recently concluded that a mandatory pre-dispute arbitration agreement is voidable when a plaintiff brings multiple claims in a case that includes sexual harassment and/or sexual assault.

This is the first federal appellate ruling to find that an entire lawsuit is barred from arbitration under the EFAA if it includes a sexual harassment claim. Other federal circuit courts have not yet ruled on this question, although several cases are pending.

In this case, the plaintiff was diagnosed with post-traumatic stress disorder, attention deficit hyperactivity disorder, social phobia, depression, sleep apnea, insomnia, and restless leg syndrome. In suing her former employer, she alleged sexual harassment under Title VII of the Civil Rights Act of 1964 and failure to accommodate her disability under the Americans with Disabilities Act (ADA). Her former employer moved to dismiss her sexual harassment claim and compel arbitration of her ADA claim.

Background

The plaintiff, a paralegal, signed an arbitration agreement when she began working at Adams and Reese in 2022. She alleged that her supervisor often made sexual comments to her and about her appearance, clothing, and personal life, even after she rejected his frequent invitations to social events.

Sometimes the paralegal’s sleep medication caused her to arrive late at work. At first, the firm allowed a flexible schedule, but later it placed her on a fixed schedule and told her she would be fired if she arrived late again. The law firm discharged her on May 11, 2023, after she arrived late.

The former employee sued in July 2024 for disability discrimination, alleging the firm did not engage in an interactive process and failed to accommodate her medical need to take sedatives to sleep. She also alleged sexual harassment and retaliation under Title VII, which makes it illegal for employers to discriminate against employees based on sex or retaliate against employees for reporting sexual harassment.

Adams and Reese asked the court to dismiss the Title VII claims and compel arbitration of the ADA claims.

The Court’s Decision

On February 25, 2025, the U.S. District Court for the Middle District of Tennessee denied the employer’s motion to dismiss, finding that the supervisor’s repeated sexual comments were “sufficiently pervasive” and unwelcome to plausibly allege sexual harassment under Title VII. The district court also denied the motion to compel arbitration of the ADA claim, finding that the EFAA barred arbitration of an entire case that included a sexual harassment dispute. The law firm appealed.

On appeal, the Sixth Circuit addressed whether the EFAA barred arbitration of all of the claims alleged by the plaintiff or only barred arbitration of her sexual harassment claim. Reviewing the language of the EFAA, the Sixth Circuit observed that the statute invalidates a pre-dispute arbitration agreement “with respect to a case” that “relates to” a sexual assault or sexual harassment dispute. The court explained that “case” is the “operative word here” and “encompass[es] a plaintiff’s entire suit,” not just her sexual harassment or sexual assault claim.

The Sixth Circuit therefore affirmed the district court’s denial of the motion to compel arbitration of the ADA claim because it was alleged within a case that relates to a sexual harassment dispute.

The Sixth Circuit covers Kentucky, Michigan, Ohio, and Tennessee.

Next Steps

The Sixth Circuit is the first federal court of appeals to hold that the EFAA bars enforcement of a mandatory pre-dispute arbitration agreement with respect to an entire case that includes a sexual harassment claim. Other courts may follow suit.

Employers can expect that plaintiffs with allegations of sexual harassment will now be more likely to try to invalidate their arbitration agreements under the EFAA with respect to all claims in a case, including those unrelated to alleged harassment.

Employers may wish to review their arbitration agreements and other employment agreements to determine whether it is possible to mitigate this risk through additional or updated contract terms. In addition, employers may wish to ensure that their anti-harassment and anti-discrimination policies and procedures are up-to-date and effectively enforced.

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

Eric M. Fox is a shareholder in Ogletree Deakins’ San Diego office.

Christopher C. Murray is a shareholder in Ogletree Deakins’ Indianapolis 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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Background

Under the Jeanne Clery Campus Safety Act, colleges and universities that receive federal financial aid are required to collect and disclose statistics for certain “reported” crimes, including sex offenses. In Galvin, the plaintiff employee, Thomas Galvin, served as the defendant college’s primary campus security authority and chief compliance officer for the Clery Act. As such, Galvin was responsible for making Clery Act disclosures.

In November 2010, Galvin learned of two complaints from a student, who alleged that she had been sexually assaulted by two college professors. Despite this knowledge, he failed to report the complaints at the direction of other college employees. In July 2011, Galvin reported his concerns and objections about the college’s failure to make Clery Act disclosures to Massachusetts’s Office of the State Auditor, which then notified the chair of the college’s board of trustees. In October 2011, Galvin submitted the college’s 2011 Clery Act report without including the two 2010 complaints. In July 2012, the college issued a negative performance evaluation of Galvin, based on his failure to comply with critical regulatory requirements, and in August 2012, the college terminated his employment.

Galvin subsequently filed a lawsuit against the college, claiming that it had wrongfully terminated his employment in violation of the MWA. The trial court partially granted Galvin’s motion for summary judgment, holding that Galvin was entitled to whistleblower protection and had engaged in protected activity because he reasonably believed the college had violated the Clery Act and had objected to this violation during the July 2011 meeting with staff from the Office of the State Auditor. The court held that the remaining issue for trial was whether the whistleblowing was the cause of Galvin’s employment termination. The jury ultimately found in favor of Galvin and awarded him $980,000.

The SJC’s Analysis

On appeal, the college sought review only of the trial court’s grant of summary judgment on the issue of whether Galvin had engaged in protected activity under the MWA. The SJC affirmed the trial court’s summary judgment ruling. The SJC reiterated that the MWA (1) requires only an objectively reasonable belief that the activity to which an employee objects is unlawful, and (2) does not exclude from protection those employees who are involved in the wrongdoing.

The SJC found that Galvin had objected to conduct that was undisputedly illegal under the Clery Act. Additionally, the SJC explicitly rejected the college’s argument that employees who are implicated in the wrongdoing should be excluded from whistleblower protection. The SJC reasoned that “excluding employees reporting undisputedly unlawful activity from whistleblower protection when they are implicated in the employer’s wrongdoing would discourage the revelation of such wrongdoing, which is one of the purposes of the MWA.” An employee’s involvement in the illegal activity, however, remains relevant to the separate question of causation, i.e., “whether the cause of the termination was the whistleblowing or the employee’s own misconduct.”

Key Takeaways

An employee implicated in the wrongdoing to which he or she objects remains entitled to protection under the MWA. Accordingly, employers should be aware that they are not insulated from liability solely because the complaining employee participated in the alleged misconduct.

Ogletree Deakins’ Boston office will continue to monitor developments and provide updates on the Ethics / Whistleblower, Higher Education, and Massachusetts blogs as additional information becomes available.

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Quick Hits

• California legislation (AB 1940) would add perimenopause, menopause, and postmenopause to the definition of “sex” under the Fair Employment and Housing Act, making discrimination based on these conditions unlawful.
• If AB 1940 is enacted, employers may want to prepare for an increase in accommodation requests related to menopause systems such as hot flashes and fatigue.
• AB 1940’s explicit statutory protections may lead to heightened enforcement activity by the California Civil Rights Department.

Summary of AB 1940

The bill would make three primary changes to California law. First, and most significantly, AB 1940 would amend Section 12926 of the Government Code to expand the definition of “sex” under FEHA. Currently, the definition of “sex” includes pregnancy, childbirth, breastfeeding, and medical conditions related to these childbearing stages. Under AB 1940, this definition would be broadened to include “perimenopause, menopause, or postmenopause or medical conditions related to perimenopause, menopause, and postmenopause.”

Second, the bill would require the Civil Rights Department to update its workplace discrimination poster by July 1, 2027, to notify women of their rights and protections regarding perimenopause, menopause, postmenopause, and related medical conditions.

Third, AB 1940 would mandate that the Office of Community Partnerships and Strategic Communications raise awareness of employment rights for women experiencing these conditions by July 1, 2027. This includes developing and distributing public education materials explaining workplace protections applicable to employees experiencing menopause-related symptoms, including rights related to reasonable accommodations, medical leave, disability discrimination, and retaliation under state and federal law. The office would be required to provide culturally competent and linguistically appropriate outreach, making materials available in languages required by state law and tailoring messaging to reach diverse communities, including women of color, low-income workers, immigrant workers, and older workers. Additionally, the office would be required to conduct statewide public awareness campaigns to educate both employees and employers about menopause in the workplace, with an emphasis on reducing stigma, promoting understanding, and encouraging compliance with existing employment laws.

Impact on California Employers

The potential implications of AB 1940 for California employers could be substantial. By explicitly including menopause-related conditions within the definition of “sex,” the bill clarifies that discrimination, harassment, or failing to accommodate employees experiencing these conditions would constitute sex-based discrimination under FEHA. This means that employers with five or more employees would be prohibited from taking adverse employment actions against individuals because of perimenopause, menopause, or postmenopause.

Employers may face an increase in accommodation requests from employees experiencing menopause-related symptoms if AB 1940 is enacted. The bill’s public education campaign specifically informs employees of their rights to reasonable accommodations for menopause-related symptoms. Under existing FEHA provisions, reasonable accommodations may include job restructuring, part-time or modified work schedules, reassignment to a vacant position, and other similar modifications. Employers may expect requests for schedule flexibility, temperature adjustments, additional breaks, or other workplace modifications to address symptoms such as hot flashes, fatigue, or difficulty concentrating.

The bill also heightens litigation risk. AB 1940 would codify menopause-related protections, thus providing a clearer legal basis for employees to bring discrimination claims. Employers that fail to engage in the interactive process or provide reasonable accommodations would face liability for sex-based discrimination. The explicit statutory protection would likely result in increased enforcement activity by the Civil Rights Department and greater employee awareness of legal remedies, including the right to file complaints and seek legal, medical, or workplace support.

Conclusion

AB 1940 reflects California’s continuing commitment to expand workplace protections for protected groups. Other jurisdictions have also moved to expand workplace protections to cover women experiencing menopause-related symptoms, including Illinois, Rhode Island, and Philadelphia.

Ogletree Deakins’ California offices and Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor developments and will post updates on the California and Leaves of Absence blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal covers developments in Protected Characteristics, including menopause protections, under federal, state, and major locality laws. All client-users have access to Snapshots and Updates. Premium and Advanced subscribers have access to updated policy templates. 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

• FinCEN has launched a confidential webpage for reporting tips on fraud, money laundering, and sanctions violations, enhancing support for whistleblowers.
• Whistleblowers reporting violations to FinCEN are protected from retaliation by their employers and may receive rewards ranging from 10 percent to 30 percent of monetary sanctions that exceed $1 million, once new regulations are finalized.

Q: What types of whistleblower tips are considered under this new website?

A: FinCEN’s Office of the Whistleblower accepts tips related to bank or mortgage fraud, wire or check fraud, identity theft, money laundering, U.S. sanctions violations, tax evasion, online scams, and government benefit fraud schemes. FinCEN helps to enforce the Bank Secrecy Act of 1970, the U.S. Patriot Act of 2001, the Anti-Money Laundering Act of 2020, the International Emergency Economic Powers Act, the Trading with the Enemy Act, the Foreign Narcotics Kingpin Designation Act, the Corporate Transparency Act, and federal regulations covering reporting and recordkeeping requirements for banks, money services businesses, and other financial institutions.

Q: Can you explain more about the types of fraud FinCEN is looking to uncover?

A: In a bulletin, FinCEN gave examples of misconduct by financial institutions, including failing to conduct customer due diligence, falsifying trade documentation, failing to comply with a Geographic Targeting Order, and having insufficient controls to detect virtual currency investment scams and “smurfing,” which is a money-laundering technique of breaking large cash deposits into smaller amounts to evade bank reporting thresholds. It also gave examples of fraud to circumvent customer verification and due diligence requirements, including using stolen or fake identities, creating “deepfake” identity documents, lying about providing government services, and impersonating a government agency.

Q: What types of employers may be subject to FinCEN enforcement actions?

A: FinCEN regulates banks, credit unions, money transmitters, currency exchangers, check cashers, and issuers of traveler’s checks and money orders. It also regulates stockbrokers, investment advisers, loan and finance companies, and pawnbrokers.

Q: What steps can employers take now?

A: Employers may wish to remind employees about the proper avenues to report misconduct internally. Such internal reporting can provide the employer with an opportunity to investigate and remediate misconduct in case an employee also makes a report to FinCEN under its whistleblower program. Additionally, employers may consider reviewing and updating their retaliation policies to encourage receipt of internal reports. However, employers cannot prevent an employee from reporting a possible violation of law to a government agency.

Q: What are the legal protections for FinCEN whistleblowers?

A: An employer is prohibited from discharging, demoting, suspending, threatening, blacklisting, harassing, or discriminating against a whistleblower in the terms and conditions of employment or post-employment because of any lawful act done by the whistleblower. Lawful acts include participating in an investigation and reporting misconduct that the whistleblower reasonably believes could constitute a legal violation.

Q: Do financial whistleblowers receive rewards for providing information that leads to successful enforcement?

A: Under the whistleblower program, if the information leads to monetary sanctions exceeding $1 million, the financial whistleblower may receive between 10 percent and 30 percent of what was collected in monetary sanctions. FinCEN plans to publish a regulation to fully implement whistleblower incentive provisions in the federal code, as amended by the Anti-Money Laundering Act of 2020 and the Anti-Money Laundering Whistleblower Improvement Act of 2022. Once that federal regulation is finalized, FinCEN will begin processing and paying awards.

Ogletree Deakins’ Whistleblower and Compliance Practice Group and Financial Services Industry Group will continue to monitor developments and will post updates on the Ethics/Whistleblower blog as additional information becomes available.

Jane A. Norberg is a shareholder in Ogletree Deakins’ Washington, D.C., office and the former chief of the Office of the Whistleblower at the Securities and Exchange Commission.

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

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