Quick Hits

• Employers with employees in Minnesota must designate and communicate their chosen accrual year for ESST or it defaults to the calendar year.
• Eligibility is based on a “good faith” determination that an employee will work at least eighty hours per year in Minnesota.
• Employees—not employers—control whether ESST is used.
• ESST used for a nonqualifying purpose is not protected and may be subject to discipline in accordance with the employer’s policies.
• Minnesota Paid Leave is excluded from ESST requirements.

These updates are essential to maintaining compliance and managing ESST effectively. Below is a detailed breakdown of what the new administrative rules say and what it means for employers.

Accrual Year

Employers must designate and clearly communicate the accrual year to each employee. If no accrual year is defined, it defaults to the calendar year.

Any changes to the accrual year must be:

• communicated in writing before the change takes effect, consistent with Minnesota’s Wage Theft Law; and
• structured so as to not to negatively impact an employee’s ability to accrue ESST.

Hours Worked and Eligibility

Eligibility: An employee is eligible for ESST based on a “good faith” determinationof whether an employee is anticipated to perform work for at least eighty hours per year in Minnesota. “Good faith” means the employer, at a minimum, evaluated the employee’s anticipated work schedule and location of hours in a way that is not knowingly false or in reckless disregard of the truth.

Determining hours worked for exempt employees: For exempt employees, an employer cannot deduct more ESST than the number of hours for which the employee is deemed to work for accrual purposes when they take a full day of ESST.

Indeterminate shift: For employees with indeterminate shifts (i.e., a shift defined by business needs rather than a specific number of hours), employers must calculate ESST deductions using one of three methods:

• the hours worked by the replacement worker (if any),
• the hours worked by the employee in the most recent similar shift of an indeterminate length, or
• the greatest number of hours worked by a similarly situated employee (if any) who worked the shift for which the employee used ESST.

If an employee uses ESST after beginning a shift of indeterminate length, the employer must use one of the above methods and deduct from the employee’s available ESST the amount associated with the selected option minus the hours already worked by the employee during the shift.

Time Credited and Increments of Accrual

Crediting accrual: ESST must be “credited” (i.e., accrued and available for use) by the regular payday following each corresponding pay period, based on all hours worked. ESST is considered “accrued” when the employer credits the time.

Increment of time accrued: Employers are not required to credit employees with less than hour-unit increments of ESST. For example, an employee who works 120 hours will accrue four hours of ESST (120 ÷ 30 = 4) and will not earn another hour until the employee works another thirty hours.

Rehire: For employees rehired within 180 days, the maximum reinstatement of previously accrued ESST is eighty hours, unless the employer agrees to a higher amount or is otherwise required by law.

Accrual and Advancing Methods

If an employer chooses to “advance” ESST to employees, it must be calculated at no less than the standard rate of one hour of ESST per every thirty hours worked. Employers are not required to advance more than forty-eight hours. However, if the advanced amount falls short of what the employee accrued based on hours worked, the employer must make up the difference within fifteen calendar days of the employee’s actual hours surpassing the anticipated amount.

Changes to accrual methods must be communicated in writing, consistent with Minnesota’s Wage Theft law, and cannot take effect until the first day of the next accrual year. Employers that fail to provide timely written notice must maintain the existing accrual method, unless the employee agrees otherwise.

Importantly, the administrative rules clarify that employers that frontload ESST are not required to also provide accrual—it is one or the other.

Employee Use

Employers cannot require employees to use ESST. The right to use—or not use—ESST belongs to the employee. If an employee chooses not to use ESST, the resulting absence is unprotected.

Incentives

If a bonus, reward, or other incentive is tied to a specified goal such as hours worked, products sold, or perfect attendance, and an employee fails to meet that goal due to ESST use, the incentive may be denied—unless the same incentive is paid to employees on any other type of leave.

Reasonable Documentation

Employees who fail to provide reasonable documentation under Minn. Stat. § 181.9947, subd. 3 are not protected under the ESST law. Employers must clearly communicate any documentation requirement and give employees a reasonable amount of time to provide it.

Misuse of ESST

Misuse of ESST—defined as using ESST for a purpose not covered under Minn. Stat. § 181.9447, subd. 1—is not protected under the law and may be subject to employer discipline.

Notwithstanding the timelines provided in Minn. Stat. § 181.9447, subd. 3(a), employers may require reasonable documentation when there is a pattern or clear instance of suspected misuse by the employee, including when:

• an employee repeatedly uses ESST on their scheduled workday immediately before or after a scheduled day off, vacation, or holiday;
• an employee repeatedly uses ESST in increments of less than thirty minutes at the start or end of a scheduled shift;
• an employee uses ESST on a day for which the employer previously denied the employee’s request to take other paid leave; or
• documentation or other evidence conflicts with the employee’s claimed use of ESST.

Requiring reasonable documentation in these circumstances is not retaliation. However, employers cannot deny an employee’s future use of ESST for a qualifying purpose based only on past misuse or suspicion of misuse.

More Generous Sick and Safe Time Policies

Excess paid time off (PTO): Excess PTO and other paid leave is subject to ESST minimum standards only when the leave is being used for a qualifying ESST purpose.

Minnesota Paid Leave: Minnesota Paid Leave is explicitly excluded from ESST requirements. The rules clarify that Minnesota Paid Leave qualifies as an “other salary continuation benefit,” meaning it is not subject to ESST standards even when used for an ESST-covered reason. Without this distinction, employers would have faced the administrative burden of applying ESST requirements to Minnesota Paid Leave—a complication that has now been avoided.

Ogletree Deakins’ Minneapolis office will continue to monitor developments and will post updates on the Leaves of Absence and Minnesota blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal covers legal developments in state and major locality paid sick leave laws, including Minnesota’s Earned Sick and Safe Time requirements, as well as state laws requiring notice of wage and hour changes (as in Minnesota’s Wage Theft Law). Premium-level subscribers have access to comprehensive updated law summaries and policies; 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.

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Quick Hits

• In EEOC v. SkyWest Airlines, Inc., the Fifth Circuit upheld a lower court’s ruling that Title VII plaintiffs do not need to take steps to reduce their damages for emotional distress.
• A Dallas-Fort Worth International Airport parts clerk sued SkyWest Airlines for sexual harassment and retaliation, and a Dallas jury awarded her $2 million in punitive damages and $170,000 for emotional harm, an award later reduced to statutory cap of $300,000.
• The Fifth Circuit upheld the admission of the plaintiff’s text messages to her husband as evidence of her mental and physical state during the harassment.
• The ruling is binding on employers in Louisiana, Mississippi, and Texas, and underscores the importance of prompt, thorough investigations into workplace harassment complaints.

Title VII prohibits workplace discrimination, harassment, and retaliation based on sex and other legally protected characteristics. Sexual harassment creates a legally actionable hostile work environment when the unwelcome conduct is either so severe or so pervasive that a reasonable person would consider the workplace intimidating, abusive, or offensive.

Background on the Case

A parts clerk for SkyWest Airlines at the Dallas-Fort Worth International Airport alleged that several coworkers, including a maintenance supervisor, subjected her to sexual harassment, including asking if she liked “whips and chains and leathers,” joking about selling her as a prostitute, and displaying pornographic images on computer screens. She claimed that the coworkers frequently joked about rape—up to forty times in a single day. At the time, the plaintiff sent texts to her husband about the harassment.

The employee told her supervisor about the harassment, and he told her that taking any action in response “would just put a larger target on [her] back.” As a result, the employee suffered headaches, nightmares, and vomiting. She started taking antidepressants and took a medical leave of absence. The harassment continued when she returned to work, and she reported it to a human resources manager. While the plaintiff was out on paid administrative leave, the HR manager interviewed witnesses, gave written warnings to some employees, and ordered some employees to undergo additional training. The plaintiff eventually decided to accept the airline’s early retirement offer.

On the plaintiff’s behalf, the U.S. Equal Employment Opportunity Commission (EEOC) sued SkyWest for sexual harassment and retaliation under Title VII. It argued that the internal investigation was insufficient and ineffective. To recover punitive damages, the EEOC needed to prove that SkyWest acted with malice or reckless indifference to the employee’s right to a workplace free of discrimination and harassment based on sex.

In November 2024, a Dallas jury decided that the plaintiff was harassed based on her sex and that SkyWest failed to take prompt remedial action. The jury awarded $2 million in punitive damages and $170,000 for emotional harm. It also found SkyWest did not retaliate against the plaintiff.

SkyWest moved for a new trial, arguing that the federal district court erroneously admitted the plaintiff’s text messages describing the harassment to her husband and others as evidence. The airline also argued that the court failed to instruct the jury to limit compensatory damages for emotional distress. It contended that Title VII plaintiffs have a duty to mitigate their losses by, for example, going to therapy or taking medication.

In March 2025, the U.S. District Court for the Northern District of Texas denied the airline’s motion for a new trial and reduced the damages down to the statutory cap to $300,000. It found that SkyWest did not make a good-faith effort to comply with Title VII because the HR manager “did not interview many of the employees implicated by [the plaintiff’s] allegations; did not subject those employees whom she did interview to fulsome questioning; did not follow her standard practice of writing an investigative summary at the investigation’s conclusion; and subjected the employees whom she found to have violated SkyWest’s sexual harassment policy to lenient corrective action, or, in one case, no corrective action at all.”

The district court stated that “even if Title VII imposes some duty to mitigate compensatory damages, it does not impose a duty to mitigate emotional harm.”

Fifth Circuit Ruling

The Fifth Circuit concluded the text messages were admissible because they described events as they happened contemporaneously, and they reflected the plaintiff’s mental and physical state at the time. The court reasoned that whether the plaintiff “subjectively perceived the harassment as abusive” was relevant to the case.

The Fifth Circuit also held that Title VII plaintiffs are not required to mitigate damages for emotional distress. The court reasoned that because the statute imposes a mitigation requirement for backpay, but includes no comparable requirement for compensatory damages, the U.S. Congress did not intend to impose a duty to mitigate compensatory damages generally. The court further concluded that, even if some duty to mitigate compensatory damages existed, it would not extend to emotional distress because there is no well-established common-law principle requiring plaintiffs to mitigate that type of harm. The Fifth Circuit aligned with the majority of federal courts that have addressed this issue.

The Fifth Circuit further affirmed the jury’s punitive damages award. The court held that evidence that the maintenance supervisor actively participated in the harassment, despite receiving regular sexual harassment training, was sufficient to support a finding that SkyWest acted with malice or reckless indifference. The court held that deficiencies in the HR investigation—including randomly selecting only some witnesses for interviews, failing to ask relevant follow-up questions, and disciplining no one for the supervisor’s conduct—allowed the jury to conclude that SkyWest failed to establish a good-faith defense to punitive damages.

Key Takeaways

Employers can show a good-faith effort to comply with Title VII by distributing a clearly written policy prohibiting sexual harassment, providing training on sexual harassment, and investigating an employee’s sexual harassment complaints. Taking prompt corrective actions to prevent future violations may help to reduce an employer’s liability. In this case, the Fifth Circuit found that, although SkyWest had a sexual harassment policy and provided training, deficiencies in its internal investigation demonstrated that SkyWest could not establish a good-faith defense to punitive damages.

Ogletree Deakins’ Employment Law Practice Group will continue to monitor developments and will post updates on the Employment Law, Louisiana, Mississippi, Texas, and Workplace Investigations and Organizational Assessments blogs as additional information becomes available.

Tiffany Stacy is a shareholder in Ogletree Deakins’ San Antonio office.

Shaina E. Hicks is of counsel in Ogletree Deakins’ Dallas 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 Seventh Circuit held that the BIPA clarifying amendments, which limit plaintiffs to “at most, one recovery” per person per method of collection, apply retroactively to pending cases.
• The court found “the Illinois law of retroactivity is well established, allowing us to predict how the Supreme Court of Illinois would rule with a high degree of confidence.”
• Because the amendment addresses only the statutory damages available to plaintiffs—not BIPA’s substantive standards of liability—it constitutes a remedial, procedural change under Illinois law.
• The court emphasized that “Illinois law has affirmed this general principle for many decades.”

Background

In 2023, in Cothron v. White Castle System, Inc., the Supreme Court of Illinois held that a new BIPA claim accrues “with every scan or transmission” of biometric information. Recognizing that this per-scan accrual theory might produce “annihilative liability” for businesses, the court invited the legislature to “review these policy concerns and make clear its intent regarding the assessment of damages under the Act.”

In response, the Illinois General Assembly amended Section 20 of BIPA, effective August 2, 2024. The amendment provides that a private entity that collects biometric information “in more than one instance … from the same person using the same method of collection” has committed “a single violation” for which “the aggrieved person is entitled to, at most, one recovery under this Section.”

The Court’s Analysis

The Seventh Circuit consolidated three interlocutory appeals presenting the common question of whether the Section 20 amendment applies retroactively. The financial stakes were substantial—one plaintiff alone stood to recover $7.5 million based on approximately 1,500 fingerprint scans, and a putative class action raised the specter of billions of dollars in damages.

Applying the Landgraf framework as modified by the Supreme Court of Illinois, the court concluded that the amendment “applies retroactively to cases pending at the time it was enacted” because “it impacts only the statutory damages available to plaintiffs––it does not change BIPA’s substantive standards of liability.”

The court identified two textual features demonstrating the amendment is a remedial provision:

• First, “the legislature located it in Section 20, not Section 15. It did not change Section 15 at all, even though that was the portion of BIPA interpreted in Cothron and the one setting substantive standards for liability under the Act. Instead, it amended the portion of the statute governing liquidated damages.”
• Second, “the plain language of the amendment focuses on remedies. It indicates that an ‘aggrieved person is entitled to, at most, one recovery under this Section.’” (Emphasis in the original.)

“In tandem, these points highlight that the amendment did not alter when ‘a cause of action … has arisen,’ nor did it change ‘the rights, duties, and obligations of persons to one another’—the hallmarks of substantive changes.” The court concluded that the amendment “simply cabined the recovery available against defendants who violate the Act” and that “[t]he best reading of BIPA Section 20 is that it covers only remedies.”

Practical Impact

Clay is a landmark ruling for employers defending BIPA claims in federal court. By confirming that the 2024 amendments apply to pending litigation, the decision dramatically reduces damages exposure in cases that were filed before the amendments took effect. Employers facing per-scan damages theories in pending BIPA cases may want to evaluate whether this ruling provides a basis for dispositive motions or significantly enhanced settlement posture.

Ogletree Deakins’ Chicago office and Cybersecurity and Privacy Practice Group will continue to monitor developments in BIPA litigation and will post updates on the Class Action, Cybersecurity and Privacy, and Illinois blogs as additional information becomes available.

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Quick Hits

• Cal/OSHA is considering modifications to its proposed workplace inspection regulation after receiving oral and written comments following an April 1, 2026, public hearing.
• The proposed rule would define the roles of employer representatives and employee-authorized representatives during workplace inspections.
• Under the proposed rule, an “employee-authorized representative” may be a fellow employee, a third party, or a collective bargaining representative.
• The proposed rule would not alter the basic consent-and-warrant framework for Cal/OSHA inspections, but it could significantly affect how employers manage the “walkaround” portion of an inspection once a Cal/OSHA inspector is on site.

The notice opened a fifteen-day public comment period, with written comments due by July 16, 2026, at 11:59 p.m.

On February 13, 2026, Cal/OSHA issued a notice of proposed rulemaking to add section 331.8 to Title 8 of the California Code of Regulations, addressing “Employer Representative and Representative Authorized by Employees During Workplace Inspections.” Following a public hearing on April 1, 2026, and a public comment period, Cal/OSHA announced modifications to the proposed section and invited further written comments.

California Labor Code section 6314 provides that, during a Cal/OSHA inspection, both an employer representative and an employee-authorized representative shall have the opportunity to accompany the inspector. Cal/OSHA has noted that no California regulation currently implements or interprets the term “representative authorized by his or her employees” as used in Labor Code section 6314(d).

To fill this gap, the proposal defines an “employee-authorized representative” as a fellow employee, a third party, or a collective bargaining representative. In addition, a nonemployee, nonunion third party may accompany a Cal/OSHA inspector if the inspector determines that (1) good cause exists and (2) the individual’s participation is reasonably necessary to conduct an effective and thorough inspection.

In developing the proposal, Cal/OSHA looked to the federal Occupational Safety and Health Administration’s (OSHA) “Worker Walkaround Representative Designation Process,” which became effective on May 31, 2024. Because California operates an OSHA-approved state plan, Cal/OSHA has stated that its workplace inspection rights and procedures must be at least as effective as OSHA’s current procedures.

Current Inspection Framework

Under the current framework, Cal/OSHA has broad statutory authority to access, enter, and inspect workplaces. That authority, however, remains subject to statutory limits and the reasonable-search requirements of the U.S. Constitution and the California Constitution.

Key provisions include:

• Entry requirements:Cal/OSHA inspectors generally must obtain either employer consent or an inspection warrant before entering a workplace. Evidence obtained through an unlawful inspection may be suppressed.
• Consent standards:Consent must be freely and voluntarily given and may not rest on mere submission to an express or implied assertion of government authority. An employer’s failure to object does not, by itself, establish implied consent. Consent may be provided by the property owner or by any individual whom the inspector reasonably and in good faith believes has authority to grant access, such as a site superintendent or personnel manager.
• Scope of the consent inquiry:Whether valid consent was given is a fact-specific determination. Cal/OSHA is not required to advise the employer of its right to refuse entry, but if it relies on consent to justify a warrantless inspection, it bears the burden of proving that consent was voluntary.

Proposed Changes to the Walkaround Requirements

Proposed section 331.8 would establish a more specific framework governing the participation of employer representatives, employee-authorized representatives, and third parties during Cal/OSHA inspections.

The principal changes include:

• Walkaround rights:Both employer and employee-authorized representatives would have the opportunity to accompany the inspector, who could also permit additional representatives to participate.
• Representative qualifications:An employee-authorized representative may be an employee, a collective bargaining representative, or another third party. A nonemployee, nonunion representative may participate only if the inspector determines that good cause exists and the person’s involvement is reasonably necessary to conduct an effective and thorough inspection. Relevant considerations include industry expertise, worksite knowledge, familiarity with particular work processes, and language or communication skills.
• Dispute resolution and inspector authority:The inspector would be “in charge of inspections” and would have authority to resolve disputes over who qualifies as an authorized representative (discretion Cal/OSHA has explained is intended to prevent delays or interference with the inspection process). The inspector could also limit the scope of representatives’ interactions with each other and with employees to ensure the inspection remains fair, effective, and appropriately focused, and could deny accompaniment rights to any person whose conduct interferes with a fair and orderly inspection.
• Trade secrets:At the employer’s request, any employee-authorized representative in an area containing trade secrets must be an employee assigned to that area or a representative the employer has authorized to enter it. If no such person is available, the inspector must consult with a reasonable number of employees who work in that area regarding safety and health matters.

Practical Significance of Proposal

The proposed rule shifts the focus from whether Cal/OSHA can enter a workplace to who may participate once an inspection is underway. While the existing framework centers on lawful access (consent, warrants, and the authority of the person granting entry), proposed section 331.8 addresses the composition and conduct of the walkaround team itself.

The most significant proposed change for employers is the expanded role of nonemployee third parties. Under the proposal, a broad range of individuals could join an inspection at the inspector’s discretion, including not only technical safety specialists but also people with relevant knowledge of workplace hazards, similar industry experience, or language and communication skills. This would materially widen the universe of people who may be present during an inspection beyond what employers have traditionally encountered.

Cal/OSHA has stated that the proposed rule could improve inspection quality by providing access to specialized knowledge and encouraging employee involvement. At the same time, it would vest inspectors with greater responsibility for determining who may participate and for managing the dynamics of the walkaround, decisions that, under the current framework, employers have had more practical ability to influence.

If adopted, the rule could make Cal/OSHA inspections materially more complex, particularly in nonunion workplaces, where employee-authorized representatives have historically played little role in the walkaround process. Employers may encounter more frequent requests from worker advocates, technical experts, interpreters, or other individuals to participate as third parties, citing relevant knowledge or communication skills. Disputes over representative qualifications may also arise more commonly at the outset of inspections, with the inspector resolving disagreements in real time under the proposed framework.

The proposed rule could also affect employer decisions regarding consent. Cal/OSHA has acknowledged that some employers refuse consent to inspections and that refusals may increase if employers object to the presence of an employee-authorized representative. In Cal/OSHA’s view, the proposed rule would provide stronger grounds for obtaining inspection warrants that include access for necessary representatives.

Employer Preparation Considerations

In light of these proposed changes, employers may wish to evaluate the following:

• identifying who within the organization has authority to grant or deny consent to an inspection;
• designating the employer’s walkaround representative in advance;
• establishing a protocol for responding to proposed third-party representatives, including criteria for objecting to participation;
• addressing access controls for trade-secret, confidential, or safety-sensitive areas; and
• clarifying which supervisors, managers, or safety personnel may interact with inspectors and who should be contacted before an inspection begins.

Next Steps

Interested persons may submit written comments on the proposed modifications in the following ways:

• By email to walkaroundrule@dir.ca.gov
• By mail to Silas Shawver, Staff Counsel, Cal/OSHA Legal Unit, 1515 Clay Street, Suite 1901, Oakland, California 94612

The written comment period closes on July 16, 2026, at 11:59 p.m. Comments received regarding the proposed regulatory action will be made available on the agency’s website.

Ogletree Deakins’ California offices and Workplace Safety and Health Practice Group will continue to monitor developments with Cal/OSHA’s proposed modifications to the walkaround rule and will provide updates on the California and Workplace Safety and Health blogs as additional information becomes available.

Nicole A. Naleway is a shareholder in the Orange County office of Ogletree Deakins.

Valentina Comar is an associate in the Orange County office of Ogletree Deakins.

Logan Hannah is a law student, currently participating in the summer associate program in the Orange County office of Ogletree Deakins.

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Quick Hits

• Colorado’s law governing automatic renewal clauses in contracts now applies to businesses and individuals, rather than just individuals.
• Online automatic renewal contracts must have an online method of cancellation that does not obstruct a business’s or individual’s ability to terminate automatic renewal or continuous service, immediately.
• Businesses may still display retention offers or discounted pricing during the cancellation process, but the business must simultaneously and prominently display a cancellation link.
• For automatic renewal contracts consented to by a method outside of online means or electronic communication, and where no online cancellation option is available, cancellation must be at a physical location where the consumer utilizes any goods or services in the contract.

Under previous law, if an individual consumer consented to an automatic renewal contract through an online medium, the business could provide cancellation opportunities either online or in person.

New Requirements Under SB25-145

The law, Colo. Rev. Stat. § 6-1-732, as amended by Senate Bill (SB) 25-145, requires that if a contract was signed through an online medium, an online option for cancellation must be made available to the business or individual. This online option must further satisfy “one-step online cancellation,” which the bill defines as an online cancellation method that doesn’t obstruct or cause delays in termination of the contract or require additional action from the consumer. The amended law specifically outlines that compliance can be achieved by a one-step cancellation link through an online medium or electronic communication that is available to the consumer immediately after the consumer completes a reasonable authentication protocol.

For businesses or individuals who consented to an automatic renewal contract through means other than a website, online medium, or electronic communication, the mechanism for automatic renewal cancellation may be online or at a physical location where “the consumer utilizes any goods or services” that are subject to the automatic renewal contract.

Retention Offers and Cancellation Page Considerations

The amended law also outlines guidelines for displaying promotional material during cancellation by an online system. Now, a business may display a discounted offer, a retention benefit or information regarding effects of cancellation, so long as the direct link to cancel remains visible and prominently located.

Looking forward, businesses may want to consider the following steps:

• Auditing all contracts containing automatic renewal clauses that are offered to Colorado residents and businesses to confirm compliance with Colo. Rev. Stat. § 6-1-732
• Reviewing current online cancellation protocols in automatic renewal contracts offered to individuals or businesses in Colorado to ensure they satisfy the one-step cancellation requirements
• Ensuring that any promotional material on a cancellation page does not block any cancellation link, and that cancellation does not require significant additional steps beyond reasonable authentication

Ogletree Deakins’ Denver office will continue to monitor developments and will post updates on the Colorado blog as additional information becomes available.

Michael H. Bell is the office managing shareholder of Ogletree Deakins’ Denver office, and a shareholder in the firm’s Dallas office.

Tyler C. Strobel is an associate in the Denver office of Ogletree Deakins.

Emma Hay is a law student, currently participating in the summer associate program in the Denver office of Ogletree Deakins.

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Administration Releases Second Regulatory Agenda. Perhaps regulators in the Trump administration are reading the Buzz, because the Unified Agenda of Federal Regulatory and Deregulatory Actions was released just one week after we noted its absence. This is only the administration’s second such regulatory agenda, as the administration failed to issue a fall regulatory agenda in 2025. As always, the dates noted in the current Regulatory Agenda are closer to internal agency “guesstimates” than binding deadlines. Set forth below are the regulatory items employers should watch in the months ahead.

National Labor Relations Board. There are no short-term or long-term regulatory entries for the NLRB.

U.S. Equal Employment Opportunity Commission (EEOC). The EEOC has put forth a robust regulatory agenda. Over the next several months, the Commission plans to rescind the EEO-1 reporting form and its Uniform Guidelines on Employee Selection Procedures (which have been in place for more than forty-five years) and amend the regulations implementing the Pregnant Workers Fairness Act, among other initiatives. T. Scott Kelly, James J. Plunkett, and Nonnie L. Shivers have the details.

U.S. Department of Labor (DOL) – Wage and Hour Division (WHD)

• Independent Contractor. Comments on the Fair Labor Standards Act independent contractor proposal closed on April 28, 2026. A final rule is scheduled to be issued in October 2026.
• Joint Employer. In an example of how the dates in the Regulatory Agenda can sometimes be inaccurate, the WHD’s joint-employer proposal is listed as being released sometime this month. However, the proposal was already issued in April of this year, and the comment docket closed on June 22, 2026. The Regulatory Agenda does not indicate when a final rule will be issued.
• Tip Regulations. In August 2026, the WHD is scheduled to issue “a notice of proposed rulemaking to amend regulatory provisions related to tipped employees under the [Fair Labor Standards Act (FLSA)].”
• Young Workers. The WHD is scheduled to issue a proposal “relating to permissible hours of work 14- and 15-year-olds” in September 2026.
• Overtime and Compensable Hours. Proposals relating to exemptions (such as overtime) for executive, administrative, and professional (EAP) employees, as well as what “kinds of activities constitute hours worked for purposes of the FLSA,” are both listed as long-term actions.

DOL – Occupational Safety and Health Administration (OSHA)

• General Duty Clause. OSHA’s proposal to “exclude from enforcement known hazards that are inherent and integral to the essential function of a professional or performance-based occupation” is scheduled for a public hearing in August 2026.
• Lock-Out/Tag-Out Update. To “modernize United States regulations to better align with current technologies,” OSHA will issue proposed changes to its lock-out/tag-out regulations in November 2026.
• Tree Care Standard. In October 2026, OSHA is scheduled to issue a proposal to address health and safety concerns in the tree care industry.
• Heat Injury and Illness Prevention. The Trump administration continues to move forward with OSHA’s proposal to address excessive heat in the workplace. After holding public hearings on the matter in the summer of 2025, OSHA is now forecasting that it will issue a “supplemental [notice of proposed rulemaking]” in December 2026 and a final rule in October 2027.
• Subpoenas. In November 2026, OSHA is scheduled to adopt an interim final rule relating to subpoenas “to provide helpful clarity to the agency and the regulated public on these issues, while promoting transparency and uniform subpoena practice across the agency.”
• Workplace Violence in Health Care and Social Assistance. This proposal, which has appeared on recent Regulatory Agendas, has now been moved to a long-term action.

DOL – Employee Benefits Security Administration (EBSA)

• Environmental, Social, and Governance (ESG) Investing. The Office of Information and Regulatory Affairs is currently reviewing a proposed rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” that would amend current regulations “so that plan fiduciaries select investments and exercise shareholder rights based only on financial considerations … and not to advance social causes.” A proposal will likely be made public this summer. This policy debate has flip-flopped with each presidential administration, beginning with President Obama.
• Alternative Investing. On June 1, 2026, the public comment docket closed on EBSA’s proposal to allow retirement plan sponsors to consider alternative investment options, such as cryptocurrency. While the Regulatory Agenda does not include a date for final action, this time frame suggests that a final rule may be issued in late 2026 or early 2027.
• Association Health Plans. A proposal to allow employer groups or associations to form association health plans is scheduled for release in November 2026. The first Trump administration issued a final rule on this matter in 2018, but it was partially struck down in court and subsequently rescinded by the Biden administration.
• Mental Health Parity. In December 2026, EBSA is expected to issue a proposal relating to regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA).

Immigration

• Prevailing Wage Rule (Employment and Training Administration). On May 26, 2026, the DOL’s Employment and Training Administration (ETA) closed the public comment docket on its proposal to increase the prevailing wage levels that must be paid to EB-2 and EB-3 employment-based immigrant visas (via PERM), as well as H-1B, H-1B1, and E-3 nonimmigrant visa holders. The Regulatory Agenda does not provide a date on which a final rule might issue.
• PERM Changes (ETA). In a new entry on the Regulatory Agenda, ETA states that in July 2026 it will issue a proposal to “modernize the standards and procedures by which the Department [of Homeland Security (DHS)] receives and reviews employers’ applications for permanent labor certification by improving the minimum standards for recruiting qualified U.S. workers, strengthening safeguards for U.S. [w]orkers impacted by layoffs, and enhancing employer compliance with program requirements related to non-discriminatory recruitment and hiring practices, and record retention requirements.”
• H-1B Program Reform (U.S. Citizenship and Immigration Services (USCIS)). In August 2026, USCIS is expected to release a proposal “to reform the H-1B program by revising eligibility for cap exemptions, providing greater scrutiny for employers that have violated program requirements, and increasing oversight over third party placements, among other provisions.”
• Employment Authorization Reform for Asylum Applicants (USCIS). The comment period for this proposal ended on April 24, 2026, but the Regulatory Agenda does not provide any dates for future actions.
• Biometrics (USCIS). A final rule concerning the use and collection of biometrics in “the adjudication of any immigration application, petition, or benefit” is expected to be released in December 2026.
• Automatic Extension of Work Authorization (USCIS). On October 30, 2025, USCIS promulgated an interim final rule (IFR) that ended the practice of automatically extending work authorization for certain foreign nationals while the agency processes their work authorization applications. After receiving public comments on the IFR, USCIS is expected to release a final rule in July 2026.
• H-4 Dependent Spouses. USCIS plans to “restore DHS’s long-standing policy of not extending eligibility to request employment authorization to H-4 dependent spouses.” This regulatory proposal, which was thought to be an early priority of the administration, is listed as a long-term action.
• Duration of Status (U.S. Immigration and Customs Enforcement (ICE)). This action cleared a final review by the Office of Information and Regulatory Affairs on June 16, 2026, so a final rule is imminent.
• Practical Training (ICE). The Optional Practical Training program provides foreign national students with one year of work authorization after their graduation (and up to two additional years if they graduate in a science, technology, engineering, or mathematics (STEM) field). ICE wants to amend the program’s regulations “to address fraud and national security concerns, protect U.S. workers from being displaced by foreign nationals, and enhance the Student and Exchange Visitor Program’s capacity to oversee the program.” This proposal, originally scheduled for September 2025, is not slated to be made public until February 2027.

Visa Bond Program (U.S. Department of State). A rule to make permanent the 2025 visa bond pilot program is scheduled to be released in August 2026.

The Marshall Plan. John Marshall (1755–1835), the fourth chief justice of the Supreme Court of the United States, died 191 years ago this week in 1835. Marshall served as chief justice for thirty-four years—still the longest tenure of any chief justice to have served on the Supreme Court. Having previously served as a U.S. representative from Virginia and as President John Adams’s secretary of state, Marshall was the first person ever to have held an office in each of the three constitutional branches of the federal government. We previously examined Marshall’s decisions in McCulloch v. Maryland and Barron v. Baltimore. However, he is also the author of perhaps the most significant Supreme Court case of all: Marbury v. Madison, which established the doctrine of judicial review, whereby the judiciary serves as a “check” on the actions of the executive and legislative branches.

Quick Hits

• Oklahoma has amended its occupational safety and health citation rule to allow the ODOL to issue citations against public employers more than six months after an alleged violation when that violation arises from a fatality investigation or when third-party conduct caused the delay.
• The amendment takes effect July 11, 2026, and applies to state and local government employers covered by Oklahoma’s public employee occupational safety and health program.
• While citation issuance for violations is mandatory, fine assessment remains discretionary, and the ODOL has stated its preference for achieving compliance without assessing fines.

An amended version of OAR 380:40-1-16 (see pages 955–956 of the July 1, 2026, Oklahoma Register, as well as the ODOL’s December 15, 2025, Rule Impact Statement) now allows the ODOL to issue citations beyond the six-month window in two circumstances: (1) when a citation arises from a fatality investigation, or (2) when a delay in issuance was caused by parties other than the ODOL. According to the ODOL, fatality investigations are complex and frequently take longer than six months. This is often due to coordination with law enforcement, medical examiners, and other agencies, including reliance on outside entities to supply reports and information outside the ODOL’s control. ODOL reasoned that the prior rule was allowing violators to escape accountability on timing grounds alone.

Two Exceptions

The first exception is broad. The language of the rule amendment suggests that a citation need not be for the violation that caused the fatality; it only needs to arise from or relate to the fatality investigation. Conditions observed incidentally during a fatality inspection, even those unrelated to the death itself, could support a citation issued well after the six-month mark.

The second exception, for third-party-caused delays, is less defined. The rule provides no guidance on what conduct qualifies, which will likely generate disputes as the ODOL begins applying it.

One meaningful limitation worth noting: while citation issuance is mandatory when a violation is found, fine assessment is discretionary. The ODOL has stated its intent to work with public employers to correct violations without imposing fines where possible.

Practical Steps for Public Employers

Public employers can no longer treat the passage of six months as a signal that a post-incident investigation has run its course. For any facility or worksite that has experienced a fatality, enforcement exposure now extends through the life of the ODOL’s investigation. Practically speaking, that means:

• preserving records for as long as the investigation remains open. Inspection records, training logs, maintenance documentation, and internal communications are all potentially relevant; and
• updating legal hold procedures to reflect that fatality investigations are open-ended for citation purposes.

Scope Note

This amendment applies exclusively to public employers under Oklahoma’s Public Employees Occupational Safety and Health (PEOSH) program. Oklahoma is one of only seven states that administers its own occupational safety and health program to public sector employers exclusively rather than deferring to federal OSHA, giving it authority to set procedural rules of this kind. Private sector employers in Oklahoma remain subject to federal OSHA’s jurisdiction and its separate six-month citation deadline under 29 U.S.C. § 658(c).

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

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Quick Hits

• Recent federal circuit decisions and EEOC guidance has impacted how employers should view reassignment under the ADA as a potential accommodation.
• Federal courts are split on whether reassignment requires direct placement or merely an opportunity to compete. The EEOC takes the broadest view and is aggressively enforcing it.
• Employers that follow the broad approach eliminate compliance risk in every jurisdiction.
• Supreme Court review is widely anticipated; but the broad approach is future-proof.

The Americans with Disabilities Act (ADA) expressly lists “reassignment to a vacant position” as a reasonable accommodation, but in practice the scope of that obligation is hotly contested. How far must the employer search? Must the employee compete? This article explains the two dominant frameworks, the current circuit split, and practical steps for employers that want to stay ahead of the curve.

Two Ways to Read the Reassignment Duty

The Narrow Approach. Under this reading, an employer’s neutral, consistently applied policies can limit the reassignment obligation. If the employer requires all internal candidates to compete for openings, it may apply that policy to reassignment. Neutral transfer or geographic-scope policies may likewise cap the search. Proponents read the Supreme Court of the United States’ key accommodation decision broadly—as establishing that neutral policies generally make a disability-based preference unreasonable. Under this framework, the employee may be left to find and apply for vacancies independently.

The Broad Approach. Under this reading, reassignment means placement—not merely a chance to compete. If the employee is qualified for a vacant position, the employer must offer it directly. Neutral policies (other than bona fide seniority systems) do not excuse the duty. The employer bears primary responsibility for identifying vacancies companywide, sharing a list of options with the employee, and offering the position closest to the employee’s current role in pay, status, schedule, and location.

Where Does the EEOC Come Down?

The U.S. Equal Employment Opportunity Commission (EEOC) takes the broadest possible view. Its enforcement guidance holds that: (1) the employee need only be qualified—not the “best qualified”—so placement without competition is required; (2) the employer must lead the search and inform the employee of vacancies because it is in the best position to know what is open; (3) no geographic or departmental limit may be imposed unless the employee voluntarily sets a boundary; (4) the employer must offer the vacancy closest (in pay, benefits, title, responsibility, location, etc.) to the current role first; and (5) the Supreme Court’s key decision applies only to bona fide seniority systems, not to other neutral policies.

The only criteria the EEOC considers legitimate for eliminating a vacancy are that the employee is unqualified, the position is not actually vacant, placement would require creating a new role or bumping another employee, the position would be a promotion, the employee cannot perform the essential functions, or placement would violate a bona fide seniority system the employer does not deviate from.

The Circuit Split: Where Things Stand

Federal appellate courts are divided. The disagreement turns on how each circuit reads the Supreme Court’s key accommodation decision when applied to neutral employer policies. A slight majority of circuits—roughly six—side with the EEOC and adopt the broad approach. A minority—roughly five—take the narrower view. At least one circuit has not squarely decided.

The most prominent dispute is whether the employee must compete for a vacancy. A secondary question is whether the employer must affirmatively search for and share a list of openings—and notably, even some courts rejecting mandatory noncompetitive placement still expect the employer to participate in an interactive process and share vacancy information. The geographic-scope issue tracks the competition question: only courts allowing neutral policies to block reassignment also allow geographic limits. On timing, all courts agree that “vacant” means currently open or reasonably expected to open in a short window—generally a few weeks, not months.

Because the split is tied directly to interpreting a Supreme Court decision, eventual high court review is widely expected.

Following the Broad Approach

Following the EEOC’s guidance does not risk an adverse finding in any circuit—courts that reject the broad view would simply see the employer as having exceeded its obligations. Conversely, following the narrow approach in a broad-approach jurisdiction creates serious exposure: ADA verdicts can be staggering, with reassignment-specific outcomes reaching eight figures and broader accommodation cases producing awards in the hundreds of millions. The EEOC’s current enforcement plan expressly targets employers whose defenses challenge Commission guidance, and the agency has been actively litigating and settling ADA cases. Finally, if the Supreme Court sides with the majority, narrow-approach defenses collapse overnight.

Given the above, here are some practical steps for employers adopting the broad approach:

Confirming the threshold. Documenting the reassignment is warranted. This step includes documenting that the employee held a role, can no longer perform the essential functions with or without accommodation, or continued accommodation would be an undue hardship.

Gathering information. Critical information includes qualifications, restrictions, and relocation preferences from the employee.

Searching companywide. A companywide search involves identifying all locations and departments, reaching out to recruiters about positions opening within approximately a month, and documenting the search.

Sharing a vacancy list. Consider providing qualifications, pay, benefits, schedule, location, and relocation costs on vacancy lists. In addition, consider asking the employee to identify qualifying positions, note accommodations needed, and rank preferences.

Offering the closest match. Consider selecting positions mirroring the employee’s rankings and closest to the employee’s current role. Employers will want to be prepared to justify any deviation.

Putting it in writing. Consider providing offers in writing and obtaining a written acceptance. Employers may want to treat a refusal of a reasonable offer for nondisability reasons as a refusal of accommodation.

Maintaining status and documenting everything. Consider keeping the employee on leave or temporary assignment during the search, while not imposing artificial deadlines. Thorough documentation of each step is important since the process may be scrutinized.

Takeaways for Employers

• The broad approach eliminates legal risk in every federal circuit.
• Supreme Court review is likely; employers relying on the narrow approach may want to be prepared for potential invalidation.
• The EEOC is actively enforcing its guidance; positions at odds with it invite systemic investigations.
• Thorough, contemporaneous documentation of the interactive process is the strongest defense in any charge or litigation involving accommodations.
• Multistate employers benefit most from a uniform, broad-approach reassignment policy.

Ogletree Deakins’ Employment Law Practice Group will continue to monitor developments and will post updates on the Employment Law and Multistate Compliance blogs as additional information becomes available.

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The Spring 2026 deregulation plan incorporates, for the first time, the regulatory plans of independent agencies, now subject to White House coordination following the Supreme Court of the United States’ June 29, 2026, decision expanding presidential removal power. Among the 702 targeted rules are environmental review requirements for energy projects, energy efficiency standards, rules that promote diversity, equity, and inclusion (DEI), and specific deregulatory actions relevant to the federal contracting community.

Quick Hits

• The deregulatory actions include the rescission of Executive Order (EO) 11246’s implementing regulations, the elimination of the U.S. Equal Employment Opportunity Commission’s (EEOC) disparate-impact standard, and the proposed rescission of EEO-1 reporting requirements.
• Federal contractors’ obligations under Section 503 of the Rehabilitation Act and the Vietnam Era Veterans Readjustment Assistant Act (VEVRAA) remain intact despite the rescission of EO 11246 and the proposed defunding of the Office of Federal Contract Compliance Programs (OFCCP).
• The EEOC’s proposed rescission of EEO-1 reporting is still undergoing review by the Office of Information and Regulatory Affairs (OIRA) (expected through mid-August 2026), and existing filing obligations remain in force until rulemaking is complete.
• These deregulatory actions occur alongside new compliance requirements, including EO 14398’s mandatory DEI contract clause (FAR 52.222-90), which must be incorporated into existing contracts by July 24, 2026.

Of particular note to federal contractors, the following deregulatory actions are in the crosshairs of the Unified Agenda.

Deregulatory Proposals

Rescission of OFCCP’s EO 11246 Implementing Regulations

Among the 702 deregulatory actions is the U.S. Department of Labor’s proposed rescission of all regulations implementing Executive Order 11246, the long-standing framework that required federal contractors to maintain affirmative action programs and comply with related nondiscrimination obligations. EO 11246 was revoked by President Donald Trump on January 21, 2025, by EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.”

OFCCP published a proposed rule on July 1, 2025, to rescind the implementing regulations at 41 C.F.R. Parts 60-1, 60-2, 60-3, 60-4, 60-20, 60-30, 60-40, 60-50, and 60-999. Although a final rule has not yet been issued, the Unified Agenda confirms this rescission remains a priority. Contractors should note that implementing regulations for EO 11246 are separate and apart from those existing legal obligations under Section 503 of the Rehabilitation Act and VEVRAA. Although certain changes have also been proposed for the implementing regulations of Section 503 and VEVRAA, existing obligations remain unaffected until proposals are finalized, such as the annual preparation of affirmative action programs for individuals with disabilities and protected veterans.

EEOC Deregulatory Actions

The Unified Agenda includes several significant EEOC deregulatory actions. First, the EEOC plans to eliminate the long-standing “disparate impact” standard in proving racial discrimination. This follows EO 14281, which directed agencies to “deprioritize” disparate impact claims. The EEOC has already directed the dismissal of pending disparate impact complaints. For federal contractors, this should mean enforcement scrutiny focused exclusively on intentional disparate treatment, though private parties may still attempt to bring disparate impact claims under Title VII.

Second, the EEOC proposes to rescind federal EEO reporting and recordkeeping obligations, including the EEO-1 reporting framework. On May 14, 2026, the EEOC submitted to OIRA a proposal to rescind reporting obligations related to Title VII, the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), and the Pregnant Workers Fairness Act (PWFA). The rescission of EO 11246 already eliminated the lower fifty-employee EEO-1 filing threshold for federal contractors. However, until formal rulemaking is complete (the ninety-day OIRA review runs through approximately mid-August 2026), existing obligations remain in force, and contractors should prepare to file if the EEOC opens a 2026 filing window.

Third, on July 6, 2026, the EEOC submitted a final interpretative rule to rescind  29 C.F.R. Part 1608 governing voluntary affirmative action plans. The aim of this would be to remove longstanding guidance on permissible voluntary affirmative action in employment, potentially increasing legal uncertainty for contractors that maintained such programs under the prior framework.

DEI-Promoting Regulations

The Unified Agenda specifically targets rules that promote diversity, equity, and inclusion. While EO 14398, “Addressing DEI Discrimination by Federal Contractors” (discussed below), represents a new regulatory requirement, the Unified Agenda’s deregulatory side seeks to remove older rules across multiple agencies that previously encouraged or mandated DEI-related compliance. For federal contractors, this creates a potentially difficult dynamic to navigate: legacy DEI-promoting regulations (now being removed) versus new prohibitions on “racially discriminatory DEI activities” (now being imposed).

The Broader Context for Federal Contractors

The deregulatory actions sit within a broader landscape of regulatory change affecting federal contractors. Key concurrent developments include: EO 14398’s mandatory DEI contract clause (FAR 52.222-90), which prohibits “racially discriminatory DEI activities” and must be incorporated into existing contracts by July 24, 2026; the proposed defunding of OFCCP in the FY 2027 budget (though Congress ignored a similar proposal in fiscal year (FY) 2026 and instead preserved $101 million in funding, along with keeping Section 503/VEVRAA obligations intact); the FY 2026 National Defense Authorization Act’s (NDAA) increase of the certified cost or pricing data threshold to $10 million for defense contracts entered after June 30, 2026, with cost accounting standards (CAS) applicability thresholds potentially rising to $35 million; and the ongoing “Revolutionary FAR Overhaul” eliminating a substantial number of provisions. Collectively, these developments represent a fundamental realignment of the federal contractor compliance environment.

Considerations for Federal Contractors and Subcontractors

Federal contractors and subcontractors are navigating one of the most consequential periods of procurement reform in decades. The combination of the Revolutionary FAR Overhaul, an intense focus on anti-DEI and anti-discrimination obligations, increased cost and pricing thresholds, proposed OFCCP restructuring, and shifting enforcement priorities throughout various federal agencies, creates both compliance risks and potential competitive advantages for contractors that adapt quickly.

Contractors may consider reviewing their existing compliance playbooks, proposal templates, and subcontracting policies in light of the FAR restructuring and renumbering. It may be prudent to assess the impact of EO 14398 on internal DEI programs and subcontractor flow-down provisions, particularly in advance of the July 24, 2026, deadline for bilateral modifications to existing contracts. Defense contractors can evaluate the implications of raised CAS and certified cost or pricing data thresholds for their business models and accounting systems. All contractors should also keep a close eye on existing and potentially changing statutory and regulatory obligations, including ensuring continued compliance until and unless final rules or changes are implemented.

Next Steps

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

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

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Quick Hits

• When reviewing a mass layoff notice, the focus must generally be on the purpose of the notification procedure.
• Stating a number of employees to be laid off that is slightly too high in the mass layoff notice does not automatically render the notice invalid.

The Case

The employee worked as a machine setup technician and operator for a key manufacturer and machine builder. The employer became insolvent in November 2024. The insolvency administrator decided to shut down operations and terminate the employment relationships of all employees. In February 2025, a reconciliation of interests was concluded with the relevant works council. Subsequently, a mass layoff notice was filed with the Employment Agency (Agentur für Arbeit). After the Employment Agency received the notice, the employer terminated the employee’s employment relationship, among others. The notice of mass layoffs stated that thirty-four layoffs were to be carried out. In fact, however, thirty-one or thirty-two terminations were issued.

The employee challenged the termination, arguing that the termination was invalid because, during the proceedings under Section 17 KSchG, contradictory or incorrect information regarding the number of employees to be laid off had been provided to both the works council and the Employment Agency.

The Hagen Labor Court upheld the claim. The Hamm State Labor Court, however, dismissed it.

The BAG’s Decision

In its ruling (Ref. No. 6 AZR 7/26, decision of June 25, 2026), the BAG found that the employee’s appeal on points of law was unsuccessful. The termination remained valid.

The BAG initially based its decision on the purpose of the mass layoff notification. This notification was intended to enable the competent Employment Agency to find solutions to the anticipated problems associated with the planned layoffs.

If errors did occur in the submission of the mass layoff notice that did not, however, conflict with the purpose of the notification procedure and did not significantly impede the search for solutions, the mass layoff notice nevertheless satisfied the requirements of Section 17 KSchG and the EU Collective Redundancies Directive (Massenentlassungsrichtlinie (MERL)).

The slightly inflated number of employees to be laid off stated in the present case—thirty-four instead of thirty-one or thirty-two—did not affect the Employment Agency in its task of assessing the consequences of the layoffs, such as which labor market policy measures should be taken. The notice still allowed the Employment Agency to carry out its statutory role.

Thus, according to the BAG, the mass layoff notification remained proper and therefore effective despite the objectively incorrect information.

Practical Significance

The decision is notable, even though the corresponding press release from the BAG (the full text of the decision is not yet available) leaves open the question of when comparable errors in the notification procedure are no longer considered “minor.”

However, the decision is highly relevant in practice, as the “dismissals” to be reported in the notification procedure also include employer-initiated separation agreements. However, the conclusion of such agreements depends on the parties’ willingness to enter into them, so it is not uncommon for termination agreements that were initially “planned” to ultimately not be concluded—or at least not within the thirty-day period specified in the mass layoff notice. The BAG’s focus on the purpose and intent of the notification procedure is therefore pragmatic and correct in this context. Unfortunately, such pragmatism is not necessarily common in the case law of Germany’s highest labor court regarding mass layoff procedures.

Tatjana Serbina is counsel in the Berlin office of Ogletree Deakins.

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

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