Quick Hits

• On October 6, 2026, Washington DOSH proposed updates to construction PPE rules to align with federal OSHA requirements, including requiring employers to ensure PPE properly fits each affected employee.
• The proposal also includes minor clarifications and housekeeping revisions, with public hearings in November 2026, comments due November 23, 2026, and intended adoption on March 2, 2027.

DOSH’s primary purpose for this proposed rulemaking is to bring Washington’s construction PPE requirements in line with the federal construction PPE requirements, which were updated by the federal Occupational Safety and Health Administration (OSHA) and took effect January 2025.

The most significant proposed change to Washington’s existing construction PPE rule would require employers to “ensure that [the PPE] properly fits each affected employee.” Washington’s existing construction PPE rule does not include a requirement that the employer ensure that the PPE fits the affected employees. As the proposed rulemaking describes, federal OSHA similarly revised the federal construction PPE requirement in January 2025 to require employers to ensure that PPE properly fits each affected employee.

Notably, the proposed rule does not provide any definition or guidelines for what it means for PPE to “properly” fit an employee. Similarly, the federal OSHA rule upon which the proposed rulemaking is based also does not define the term “properly fits.”

There are also some smaller proposed changes to the rule, including revising the language of the rule so that it states expressly that employers are responsible for providing certain PPE. Other small “housekeeping” changes are also proposed, including formatting changes and the correction of typographical errors.

DOSH will hold two public virtual and telephonic hearings on the proposed rulemaking on November 10, 2026, and November 16, 2026, and the public is invited to submit comments on the proposed rulemaking until November 23, 2026. DOSH’s date of intended adoption for the revised rule is March 2, 2027.

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

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Probably not. The clause’s flow-down requirement contains an exception for subcontracts where the place of “delivery or performance” is outside the United States.

Because the exception is written in the disjunctive (i.e., “expressed by mutually exclusive alternatives joined by or”), a subcontract performed outside the United States may qualify for the exception even when the finished goods are delivered in the United States. That relatively straightforward example, however, raises harder questions for global supply chains in which manufacturing, assembly, installation, services, and delivery occur in multiple countries.

Quick Hits

• FAR 52.222-90, “Addressing DEI Discrimination by Federal Contractors,” flows down to subcontracts at any tier, including subcontracts for commercial products and commercial services, subject to an exception where the place of “delivery or performance” is outside the United States.
• The use of “or” is significant. A foreign manufacturer that performs a supply subcontract entirely at an overseas facility may fall within the exception even if the finished goods are shipped FOB destination to a U.S. location.
• The more difficult questions arise when subcontract performance occurs partly inside and partly outside the United States. FAR 52.222-90 does not expressly address how the geographic exception applies to mixed-location performance.

Applying any FAR flow-down clause begins with identifying which lower-tier relationships are subcontracts. As we discussed in a prior article on the DEI clause, the FAR defines “subcontractor” broadly to include “any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor” (FAR 44.001), although the line between a subcontractor and a vendor is not always bright. FAR 52.222-90 adds a second threshold question: even when a supplier is a subcontractor, does the geographic exception to the flow-down requirement apply?

That question is particularly important for commercial companies with global supply chains. A product may be manufactured overseas, transported to the United States, installed by personnel in another country, or pass through multiple affiliates before reaching the government. The text of FAR 52.222-90 suggests that contractors should examine both where delivery occurs and where the subcontract is performed before deciding whether the clause must be flowed down.

The Clause and Its Flow-Down Provision

FAR 52.222-90 implements EO 14398 and appears in the Revolutionary FAR Overhaul (RFO) version of FAR Part 52 posted on Acquisition.gov, which the FAR Council intends to finalize through notice-and-comment rulemaking. Contracting officers insert the clause in solicitations and contracts valued over the micro-purchase threshold, including those for commercial products and commercial services, subject to the clause’s geographic limitation. The clause is also listed among the clauses that flow down to commercial subcontracts under FAR 52.244-6.

Paragraph (c) of FAR 52.222-90 requires contractors to include the substance of the clause in subcontracts at any tier, including those for commercial products and commercial services, “except those where the place of delivery or performance is outside the United States.” The wording of the exception matters. The clause does not require both delivery and performance to occur outside the United States. Instead, it uses the disjunctive “or.” Under the ordinary reading of that language, a subcontract should fall within the exception if either its place of delivery or its place of performance is outside the United States.

The resulting compliance determination can be important. As we discussed in a prior article, FAR 52.222-90 requires prime contractors to report certain “known or reasonably knowable” subcontractor conduct that may violate the clause, states that compliance is material to the government’s payment decisions for purposes of the False Claims Act, and is paired with new causes for suspension and debarment. Contractors, therefore, have reason to determine carefully which subcontracts actually fall within the clause’s flow-down requirement.

Place of Performance and Foreign-Manufactured Goods

For a straightforward supply subcontract, identifying the place of performance may be relatively simple. The FAR treats “deliveries or performance” as a schedule term specifying the time, place, and method of delivery or performance (FAR 15.209-1), and its “place of performance” provisions (FAR 52.215-6 and 52.214-14) ask offerors to identify the street address of any plant or facility used in performing the contract.

For a supply contract, performance generally occurs where the goods are manufactured, assembled, or otherwise produced. A foreign manufacturer that makes a commercial product entirely at its own plant overseas therefore has a strong basis for concluding that the subcontract is performed outside the United States.

The fact that the finished product is ultimately delivered to the United States should not, standing alone, change that conclusion. Consider a German manufacturer that produces a commercial product entirely at its German facility and ships the product FOB destination to its customer’s warehouse in Virginia. Under FAR transportation terminology, the contractual place of delivery may be Virginia. But the place of performance remains Germany. Because FAR 52.222-90 excepts subcontracts where the place of “delivery or performance” is outside the United States, the foreign place of performance should be sufficient to bring the subcontract within the exception.

This reading is also significant because other FAR clauses use different language when the drafters intend any U.S. performance to trigger a requirement. For example, FAR 52.222-55 addresses subcontracts “performed in whole or in part in the United States,” while FAR 52.203-14 uses the formulation “performed entirely outside the United States.” FAR 52.222-90 uses neither formulation. Instead, it asks whether the “place of delivery or performance is outside the United States.”

Those textual differences become important when a subcontract does not have a single, easily identifiable place of performance.

FOB Terms Still Matter, but They Do Not End the Analysis

Although an overseas place of performance may independently satisfy the exception, delivery remains relevant because FAR 52.222-90 expressly identifies it as a separate geographic consideration.

The FAR does not define “place of delivery” specifically for purposes of FAR 52.222-90, but it does define how delivery terms work. FAR 2.101 defines “FOB” (or “F.o.b.”) as a term used in conjunction with a physical point to determine responsibility and the basis for payment of freight charges and, unless otherwise agreed, the point where title for goods passes to the buyer or consignee.

Under “F.o.b. origin,” the seller or consignor places the goods on the conveyance, and the buyer or consignee generally assumes responsibility for transportation and risk of loss. Under “F.o.b. destination,” the seller or consignor delivers the goods at the specified destination and generally remains responsible for transportation and risk of loss until the goods reach that point.

FAR Subpart 47.3 also recognizes delivery terms tailored to international shipments, including “F.o.b. vessel, port of shipment” and “F.o.b. inland point, country of importation.” The FAR expressly contemplates that supplies originating outside the contiguous United States may be acquired on either an “F.o.b. origin” or “F.o.b. destination” basis (FAR 47.304-4).

Those rules can help identify the place of delivery, but they should not be used to collapse the two parts of the FAR 52.222-90 exception into a single delivery test. If a foreign manufacturer produces goods entirely overseas and ships them “F.o.b. destination” to the United States, the U.S. delivery point does not eliminate the fact that performance occurred outside the United States. Conversely, a U.S. manufacturer that produces goods domestically but contractually delivers them at an overseas destination may have an argument that the foreign place of delivery itself satisfies the exception.

The result is that contractors likely will want to analyze delivery and performance independently rather than stopping the analysis after identifying a U.S. nexus.

The Harder Question: Performance in More Than One Country

The more difficult cases arise when a subcontract involves performance both inside and outside the United States.

Consider a foreign manufacturer that builds specialized equipment at its facility in France and ships the equipment to a U.S. contractor. The manufacturer then sends technicians to the United States to install, test, and commission the equipment. The subcontract plainly involves substantial performance outside the United States, but it also involves performance in the United States.

FAR 52.222-90 does not expressly state how its exception applies to that situation. It does not say that the exception is limited to subcontracts “performed entirely outside the United States.” Nor does it state that the clause applies whenever a subcontract is performed “in whole or in part” in the United States. The absence of either formulation leaves room for questions about how to identify “the place of performance” when there is more than one place.

Similar issues can arise when a product is manufactured overseas but customized or assembled in the United States, when testing occurs at facilities in multiple countries, or when a foreign supplier provides both products and services under the same subcontract. A contractor’s foreign affiliate may purchase goods abroad and transfer them to a U.S. entity, and FAR 52.244-6 provides that “subcontract” includes certain transfers of commercial products between divisions, subsidiaries, or affiliates at any tier. In each case, identifying a single “place of performance” may be considerably more difficult than it is for a finished commercial product manufactured entirely at one overseas facility.

Implications for Flow-Down Compliance

For companies subject to FAR 52.222-90, the geographic exception is ultimately a supply-chain and flow-down compliance issue. But the exception may be broader than contractors initially assume.

A U.S. destination does not necessarily mean that a foreign supplier must receive the clause. When a commercial product is manufactured entirely outside the United States, the overseas place of performance provides a substantial basis for applying the exception even if the supplier delivers the finished product to a U.S. location. Likewise, a foreign place of delivery may independently be relevant even where some performance occurs domestically.

The harder cases are those in which the subcontract itself crosses geographic boundaries. Contractors evaluating those relationships may want to identify where the material elements of the subcontract occur, including manufacturing, assembly, customization, testing, installation, services, and contractual delivery. They also may want to document the basis for determining whether the geographic exception applies, particularly where performance occurs in multiple countries.

For foreign commercial companies supplying goods into the U.S. federal market, the practical takeaway is equally important. The mere fact that a product ultimately reaches the United States does not necessarily subject the foreign manufacturer to FAR 52.222-90. The analysis should focus on the actual places of delivery and performance under the subcontract. Contractors may want to pay close attention to the clause’s particular wording. The word “or” may do significant work in determining the reach of FAR 52.222-90, while mixed-location performance may present the more difficult compliance question.

Next Steps

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group, Government Contracting and Reporting Practice Group, and Workforce Analytics and Compliance Practice Group 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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Quick Hits

• AI-enabled smart glasses create workplace compliance risks by enabling discreet recording, data capture, transcription, and AI analysis in settings where traditional smartphone policies may not apply.
• Employers may want to update recording and confidentiality rules to address wearable devices while accounting for consent laws, biometric privacy, trade secrets, investigations, and third-party data handling.
• Employers may want to ensure that restrictions are narrowly tailored to comply with labor laws and to preserve processes for disability accommodations, meeting protocols, and consistent manager enforcement.

The Smartphone Isn’t the Only Compliance Problem

AI-enabled glasses look like ordinary eyewear. But depending on the model, they can take photos, record video and audio, livestream, transcribe conversations, translate speech, and send what they capture to an AI assistant for analysis—all hands-free, and often with little more than a small indicator light to signal that anything is happening.

As these devices move from novelty to mainstream, employers are fielding new questions: Can an employee wear them on the floor? In a meeting? In an investigation interview? What about a candidate who shows up to an interview wearing them? The short answer is that existing policies may not have an answer at all. Below are seven issues employers may want to address now.

Issue #1: Workplace Recording and Consent Laws

Recording laws (also known as wiretapping laws) vary by state. Federal law and most states follow a one-party consent rule: a conversation may be recorded if one participant consents—including the person doing the recording. A minority of states, including California, Florida, Illinois, Maryland, Massachusetts, Montana, New Hampshire, Pennsylvania, and Washington, generally require the consent of all parties, at least where participants have a reasonable expectation of privacy.

Smart glasses make inadvertent violations easy. An employee in a one-party consent state who joins a video call with colleagues in an all-party consent state may trigger the stricter rule without realizing it. For multistate employers, a single, uniform recording rule may not map neatly onto every location—or every meeting.

Traditional recording policies compound the problem. Many were drafted with phones and handheld recorders in mind and refer to “cameras” or “recording devices” in ways that may not obviously reach a pair of glasses. If the policy does not clearly (either specifically or broadly) cover the device, enforcement becomes an argument rather than an expectation.

Issue #2: Trade Secrets and Confidential Information

Trade secret protection depends, in part, on an employer’s reasonable efforts to keep information secret. A device that can passively capture everything in a wearer’s line of sight tests those efforts. Risk areas include:

• Manufacturing environments, where proprietary processes, equipment configurations, and formulas are visible on the floor.
• Customer information, including data displayed on screens or discussed on calls.
• HR investigations, where witness identities and allegations are highly sensitive.
• Internal business discussions, such as strategy sessions, pricing, and deal planning.
• Attorney-client communications, where a recording—particularly one routed to a third-party AI platform—could raise questions about confidentiality and potential waiver of privilege.

Uploading captured material to a cloud-based service adds another layer: once information leaves the employer’s systems, control over it may be lost.

Issue #3: Privacy and Biometric Data

Smart glasses do not just capture images; they can capture faces and voices. If captured data is processed using facial recognition or voiceprint technology, biometric privacy statutes may come into play. Illinois’s Biometric Information Privacy Act (BIPA), with its private right of action, is the most prominent example, while Texas, Washington, and a growing number of comprehensive state privacy laws also regulate biometric data.

The privacy implications extend beyond employees. Customers, patients, visitors, and vendors may be recorded without knowing it—raising concerns in health care, retail, financial services, and any setting where third-party privacy is expected. And when captured information is fed into outside tools, employers may have limited visibility into how that data is stored, analyzed, or used.

Issue #4: The NLRA Complicates Blanket Prohibitions

The instinctive response—ban the glasses—carries its own risk. Section 7 of the National Labor Relations Act (NLRA) protects employees’ right to engage in protected, concerted activity for mutual aid or protection, whether or not they are unionized. The National Labor Relations Board (NLRB) has long recognized that recording can, in some circumstances, be part of protected activity, such as documenting unsafe conditions or capturing evidence of disparate treatment.

Under the Board’s 2023 decision in Stericycle, Inc., a work rule that could reasonably be interpreted to chill Section 7 activity is presumptively unlawful unless the employer shows the rule advances a legitimate and substantial business interest that cannot be achieved with a more narrowly tailored rule. The Board’s composition and priorities shift politically, and Stericycle may be revisited, but employers may want to draft with the current standard in mind.

The practical lesson: employers may want to tie restrictions to specific, articulated interests—confidentiality, safety, privacy, privilege—and to specific locations or activities, rather than prohibiting all recording everywhere.

Issue #5: ADA Accommodation Considerations

Smart glasses are not just consumer gadgets; for some employees, they may function as assistive technology. Real-time transcription and captioning may help employees who have hearing-related conditions. Object recognition, text reading, and scene description may assist employees with vision-related conditions. Prompts and reminders may support employees with certain cognitive or neurological conditions.

A request to use smart glasses as an accommodation should trigger the interactive process under the Americans with Disabilities Act (ADA) and analogous state laws. A blanket ban does not relieve an employer of that obligation. Employers may consider whether the device can be used with recording or AI features limited, in designated areas, or with other safeguards—or whether an alternative accommodation would be effective.

Issue #6: Interviews, Investigations, and HR Meetings

Some of the most sensitive moments in the employment relationship happen in a conference room. Smart glasses raises distinct questions in each:

• Candidate interviews. A candidate may use smart glasses to record the interview—or to receive real-time coaching or answers—raising both consent and assessment-integrity concerns.
• Workplace investigations. Undisclosed recordings can compromise witness confidentiality, chill candor, and complicate the investigative record.
• Discipline and termination meetings. A recording made without the employer’s knowledge may surface later as evidence in litigation or an agency charge.

Practical protocols may include asking at the start of every interview or meeting whether any device is recording, documenting the response, reminding participants of applicable policies, and offering an alternative—such as a written summary—where appropriate. HR professionals may also want to be trained to recognize the devices, since they may look like ordinary prescription glasses.

Issue #7: Policy Drafting Considerations

For most employers, the fix is not a new policy but an updated one. Suggested action items may include:

• Reviewing recording-device policies. This includes identifying gaps created by wearable technology.
• Defining covered devices broadly.
• Focusing on function—capturing audio, images, or video, or transmitting data—rather than form.
• Expressly including wearables and AI devices.
• Naming smart glasses and similar technology to remove ambiguity.
• Addressing confidentiality and safety rationales.
• Articulating the business interests behind each restriction and where it applies.
• Preserving NLRA rights. This would include clear savings language and avoiding overbroad prohibitions.
• Leaving room for ADA accommodations.
• Providing a path for employees to request exceptions through the interactive process.
• Training managers on enforcement.
• Helping supervisors recognize the devices and applying the policy consistently and lawfully.

Practical Takeaway

The question is no longer whether employees will bring AI-enabled eyewear into the workplace. The question is whether employers’ policies were written for a smartphone era and are prepared for a wearable-AI era.

Many employers already have recording policies. Few were designed for glasses that can passively record, transcribe, and analyze the workplace. Because this technology sits at the intersection of privacy, labor relations, accommodations, investigations, trade secrets, and AI governance, a measured, cross-functional review now may prevent a far more complicated conversation later.

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

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SCOTUS Begins 2026–2027 Term. This week, the Supreme Court of the United States kicked off its 2026–2027 term. The Court will continue to fill its docket in the coming weeks, but it already has several cases that should be of interest to employers (though these cases are perhaps a bit more esoteric than those of the last term, which dealt with matters concerning presidential removal powers and birthright citizenship, among others).

For example, the justices will review a case concerning pleading standards when challenging imprudent investments under the Employee Retirement Income Security Act of 1974. Another case to be heard by the Court addresses whether the United States Constitution prohibits the U.S. Department of Labor’s (DOL) administrative law judges from imposing monetary penalties on employers for H-2A violations following the Court’s 2024 decision involving the U.S. Securities and Exchange Commission.

The justices will also examine whether employees of federally funded educational institutions can pursue employment discrimination claims under Title IX of the Education Amendments of 1972—which allows for quicker access to courts and does not have statutory caps on damages—as opposed to Title VII of the Civil Rights Act of 1964. Finally, the Court will decide whether an employer can raise an affirmative defense for the first time at summary judgment that it has not previously raised without amending its answer.

DHS Proposes OPT Fee Rule. On October 10, 2026, the U.S. Department of Homeland Security (DHS) issued a notice of proposed rulemaking (NPRM or “proposal”) on “Optional Practical Training Fees.” Key elements of the proposal are as follows:

• Initial fee. The NPRM proposes that schools be charged a fee of $70,000 per F-1 nonimmigrant student the first time that they recommend an F-1 nonimmigrant student for any type of optional practical training (OPT).
• Additional fee. The NPRM also proposes a requirement that these schools then pay a $30,000 fee for each additional time they recommend the student for OPT. For example, a school would be required to pay a total of $100,000 for a student who engages in OPT prior to completing his or her program ($70,000), followed by post-graduation OPT ($30,000).
• Who pays? Schools would be required to pay the fee, but “DHS acknowledges that the schools may pass the financial obligation of this proposed fee onto F-1 nonimmigrant students, all students, or employers.”
• Effective date. The rule would apply prospectively to F-1 nonimmigrant students who apply for OPT after the effective date of the final rule, which would be sixty days after its publication in the Federal Register.
• Foreshadowing? DHS warns stakeholders that “absent these fees, it will not be able to operate OPT consistent with its focus on preventing fraud and protecting American workers and may shut down the program entirely.” (Emphasis added.)

DHS maintains that the proposal is necessary “to ensure that schools, students, and employers participate in OPT for its intended purpose instead of [as] a means to circumvent the H-1B visa program.” Because the fee is designed to have a deterrent effect, it will be deposited in the U.S. Treasury and not earmarked for any DHS processing or operational costs. Comments must be received on or before November 9, 2026.

Andrew G. Drozdowski, Amanda R. Goodman, and Tiffany Lam-Bentley have additional details.

Unions, Immigration Groups File Challenge to Policies on Adjustment of Status and Benefits Denials. A coalition of labor unions and immigrants’ rights groups has filed a legal challenge in the U.S. District Court for the District of Massachusetts against two recent DHS policies regarding adjustment of status applications and denials of benefit requests. The lawsuit alleges that these policies exceed DHS’s statutory authority and violate the Administrative Procedure Act because they are arbitrary and capricious (as DHS arguably failed to articulate a reasoned explanation for the policy changes and did not consider reliance interests) and because the policies were issued without providing the public notice or an opportunity to comment on the changes. The complaint also alleges that the policies violate the due process clause of the Fifth Amendment because they fail to provide an adequate or fair procedure for adjudicating adjustment-of-status applications. The lawsuit asks the court to preliminarily enjoin the policies during the challenge and vacate them.

FLSA Independent Contractor Reg. Moves Forward. The DOL’s Wage and Hour Division (WHD) sent the Office of Information and Regulatory Affairs (OIRA) a final version of its rule relating to independent contractor status under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. After OIRA completes its review of the draft rule—which can take several weeks—WHD will publish the final rule. If the rule is finalized as proposed, the DOL would adopt an “economic realities” test for evaluating independent contractor status that focuses on two core factors: the nature and degree of control over the work and the worker’s opportunity for profit or loss.

‘No Taxation Without Representation.’ The Stamp Act Congress began this week in 1765 in New York City. Attended by twenty-seven merchants, lawyers, and landowners from the thirteen colonies—many of whom would go on to sign the Declaration of Independence and attend the 1787 Constitutional Convention—the Congress sought to develop a unified strategy in response to Britain’s recent passage of the Stamp Act of 1765. Directed specifically at the American colonies, the Stamp Act was designed to raise revenue to cover the costs of stationing British troops in the colonies. As a result, colonists were taxed on nearly every paper they used, including newspapers, books, court documents, commercial papers, deeds, and even playing cards and dice. After eighteen days, the Congress produced the Declaration of Rights and Grievances, which contained fourteen statements. Two of these statements would feature prominently in the subsequent fight for independence and the drafting of the United States Constitution: no taxation without representation and the right to trial by jury.

Quick Hits

• Germany’s Federal Labor Court held in a recent decision that if the body with authority to represent the company authorizes individual members to represent the company alone, the termination notice may be rejected if proof of that authorization is not attached.
• A rejection within one week is generally still considered prompt.

The Case—Termination by Two of Three Supervisory Board Members

The parties disputed the validity of two termination notices. The managing director of the defendant limited liability company (Gesellschaft mit beschränkter Haftung (GmbH)) was employed as managing director under an employment agreement. The company’s articles of association provide for a supervisory board (Aufsichtsrat) responsible for appointing and removing managing directors and for concluding and terminating their employment agreements.

The three-member supervisory board unanimously resolved to remove the managing director and terminate the managing director’s employment relationship. In a letter dated August 11, 2023, the company gave ordinary notice of termination. The termination notice, however, was signed by only two of the three supervisory board members—including the chair—and no proof of authority for the two acting supervisory board members was attached. The managing director received the termination notice on August 14, 2023, and was removed as managing director at the same time.

On August 18, 2023, the managing director rejected the termination notice because no proof of authority had been submitted and challenged the authority of the two signatories. The managing director filed a lawsuit challenging the termination of the employment relationship. On December 7, 2023, the company, in a pleading transmitted electronically to the Labor Court (Arbeitsgericht), terminated the employment relationship without notice as a precautionary measure. After the company had disputed the existence of an employment relationship before the labor court, it no longer disputed it on appeal.

The Decision—No Proof of Authority, Terminations Invalid

The BAG affirmed the lower courts’ decisions and held both termination notices invalid.

In this case, the BAG found that an employment relationship existed because the company no longer disputed its existence, at least on appeal.

The first, ordinary termination was invalid because the managing director promptly rejected it by analogous application of Section 174 sentence 1 of the German Civil Code (Bürgerliches Gesetzbuch (BGB)). No authorization for the two acting supervisory board members had been presented to the managing director, and the managing director had not previously been informed of such authorization.

The authority to remove and discharge managing directors had been transferred by the company’s articles of association to the supervisory board as a whole. No authorization existed for the two acting supervisory board members to act on behalf of the supervisory board. The supervisory board resolution, which at most could have implicitly granted such authorization, had also not been presented to the managing director.

The company had not informed the managing director of such authorization either, by analogous application of Section 174 sentence 2 BGB.

In the BAG’s view, the rejection on August 18, 2023—four days after the termination notice was received—was prompt. Only after more than one week has elapsed is a rejection no longer prompt absent special circumstances of the individual case.

The subsequent extraordinary termination without notice was invalid for lack of proper form. A termination contained in a pleading transmitted electronically does not satisfy the written-form requirement. Section 46h of the German Labor Court Act (Arbeitsgerichtsgesetz (ArbGG)), under which a termination contained in a pleading now generally satisfies the written-form requirement, did not enter into force until July 17, 2024.

Takeaways

Although the present case concerned the discharge of a managing director, for which the supervisory board was responsible, the BAG’s reasoning is relevant to employee discharges as well. In that context, the decision indicates that original proof of authority is required if, under a joint-representation arrangement, only one managing director without sole authority to represent the company signs the termination notice. Without such proof, the termination notice may be rejected. A prompt rejection would render the termination invalid for lack of proof of authority.

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

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Quick Hits

• The EEOC has submitted a draft to rescind its 2012 enforcement guidance related to using arrest and conviction records in employment decisions.
• The 2012 guidance indicated that an employer’s use of criminal history information in employment decisions could implicate Title VII of the Civil Rights Act of 1964 under disparate treatment or disparate impact theories.
• The federal government has signaled its intention not to pursue enforcement of federal anti-discrimination laws based on disparate impact theories.

The 2012 guidance, “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act,” stated that employers using criminal background information to make employment decisions might violate Title VII either by disparate treatment (intentional discrimination based on a protected characteristic) or disparate impact (when a facially neutral policy or practice disproportionately affects one or more protected groups, even without intent).

The 2012 guidance indicated that employer use of criminal histories might have a disparate impact based on race and national origin, most notably on Black and Hispanic applicants and employees. It affirmed that the traditional three-part framework for establishing a disparate impact case applies in the criminal background check context:

• First, a plaintiff must identify a particular practice (such as an employer’s background check program) and establish that it causes a disparate impact.
• Then the burden shifts to the employer to show the practice is job-related and consistent with business necessity. Although the guidance set out two ways employers could establish this defense, most employers opted to do so using the targeted screen method, i.e., establishing that the employer considered (1) the nature and gravity of the offense; (2) the amount of time that has passed since the offense or completion of the sentence; and (3) the nature of the job held or sought. The guidance listed nine individualized assessment factors for employers to consider after an applicant or employee received an opportunity to address the criminal history. For example, an employer seeking to hire school bus drivers might demonstrate a business necessity for excluding applicants with recent prior convictions for driving under the influence or for distributing child pornography. Many employers have used the three Green factors (named for a federal circuit court case) plus the nine individualized assessment factors for more than fourteen years.
• Once an employer establishes that a background check program or practice is job-related and consistent with business necessity, a plaintiff still may prevail by identifying a less discriminatory alternative.

Beginning in 2025 and continuing in 2026, the federal government has pivoted away from enforcing employment laws based on disparate impact theories.

Expected Impact of the Guidance Rescission

Based on executive branch past practice, it is very possible (perhaps even likely) that the EEOC will rescind the 2012 guidance and not reissue any new guidance on employment-related criminal background checks. If that occurs, the rescission may have an impact on some legal theories under Title VII.

If the guidance is rescinded, background-check disparate-treatment allegations (e.g., evaluating or treating one applicant more harshly than another applicant based on the first applicant’s protected characteristic) should continue to be viable.

Although the EEOC likely would continue not to pursue disparate impact charges (opting instead to issue right-to-sue letters), disparate impact allegations based on criminal histories would continue in private lawsuits, as disparate impact is based on Title VII and well-established case law, not on executive agency decision-making or guidance. However, rescission of the 2012 guidance could indirectly affect private lawsuits because employers may argue that the rescission undercuts a Title VII disparate impact claim, while private plaintiffs may argue that the rescission does not impact existing Title VII disparate impact case law. Interpretive case law would have to fill in the gaps.

Additionally, the guidance recission would not impact the federal Fair Credit Reporting Act (FCRA), which imposes procedural and substantive requirements on employers using background checks obtained from third-party vendors, or state and local background check laws governing the use of criminal history information, which would continue to be enforced by agencies other than the EEOC and/or private plaintiffs. In fact, recent moves by some state agencies have made clear they are prepared to fill in the gap created by the EEOC’s decision not to pursue disparate impact claims. State and local background check laws, which have proliferated in recent years, vary widely in their restrictions and requirements, including when employers may conduct background checks and which types of criminal history may be considered in taking adverse employment actions. This patchwork of requirements may make compliance particularly challenging for multistate employers.

Next Steps

If the 2012 guidance is rescinded, the EEOC likely will continue to pursue enforcement of cases involving disparate treatment, but not disparate impact, in the use of criminal background checks in employment. Plaintiffs, on the other hand, likely will continue to bring private lawsuits alleging Title VII discrimination based on both disparate treatment and disparate impact claims. The guidance recission is not expected to directly impact the federal FCRA or state or local laws governing the use of criminal history information.

Employers may wish to stay abreast of any EEOC final rules, review their written policies to ensure compliance with state and local laws regarding background checks, and consider training hiring managers to stay compliant with background check laws.

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

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on federal and state Background Check laws, as well as those of major localities. Subscribers have access to comprehensive law summaries, policies, and templates. 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.

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

Stephen R. Woods is a shareholder in Ogletree Deakins’ Greenville office.

Gustavo A. Suárez is senior counsel in Ogletree Deakins’ Greenville office.

Amie M. Willis is compliance counsel in Ogletree Deakins’ Atlanta 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

• Under SB 951, Cal/WARN notices for job losses caused in whole or in substantial part by AI or other automated technology must include four additional items: (1) the number of affected layoffs (with classifications or occupations and work locations); (2) the job functions that will be automated; (3) the category or type of technology involved; and (4) at the top of each covered notice, the following technology-displacement statement: “This notice is for a technology displacement.”
• The Employment Development Department will publish a summary of the notices it receives on its website, along with a quarterly statewide summary of reported technological displacements.
• SB 951 takes effect on January 1, 2027.

Background: The Existing Cal/WARN Act

The Cal/WARN Act already requires employers to provide sixty days’ notice of: (a) cessations or substantial cessations of operations at covered establishments; (b) mass layoffs affecting fifty or more employees at covered establishments; and (c) relocations of all or substantially all employer operations at a covered establishment by one hundred or more miles. A “covered establishment” is any industrial or commercial facility (or part thereof) that employs or has employed seventy-five or more persons at any point in time within the past twelve months. Cal/WARN notices must be provided to the affected employees, the EDD, the local workforce development board, and certain local officials. Employers that fail to give the required notice may be liable to affected employees for back pay and benefits and face a civil penalty of up to $500 for each day of the violation.

Highlights of SB 951

New notice content: SB 951 applies when a mass layoff, relocation, or termination is “caused in whole or in substantial part by” an AI system or other automated technology replacing or automating employment positions. In those cases, the employer’s Cal/WARN notice must include, in addition to the content already required: (1) the number of layoffs substantially attributable to replacement or automation by AI or other automated technology, including the classifications or occupations and work locations involved; (2) the job functions performed by affected workers that will be automated; (3) the specific category or type of AI system or other automating technology that substantially resulted in the technological displacement; and (4) the statement “This notice is for a technology displacement” at the top of the notice.

Definition of AI: SB 951 defines “artificial intelligence” as “an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.” This definition is broad and may reach workforce software that employers do not ordinarily think of as AI.

Public reporting: The EDD must publish a summary of the technology displacement notices it receives on its website and post a quarterly statewide summary of the technological displacements reported.

Legislative report: By January 1, 2028, the EDD must submit a report to the legislature on AI’s effects on business hiring practices, including its impact on industries and occupations at the state and regional levels. The requirement to submit that report will be repealed on January 1, 2029, but it signals that a broader AI-related notice requirement could follow.

Next Steps

Employers planning workforce reductions, relocations, or closures in California may want to consider the following steps before January 1, 2027:

• Updating existing Cal/WARN notice templates.
• Documenting the extent to which AI or automated technology contributed to the elimination of specific positions or functions, in order to evaluate whether the “in whole or in substantial part” trigger is met.
• Ensuring that legal, HR, technology, and communications teams coordinate their work so that the reasons stated in Cal/WARN notices align with reduction in force documentation and internal/external communications.

Ogletree Deakins’ California offices and RIF/WARN Practice Group will continue to monitor developments and will provide updates on the Artificial Intelligence and Innovation, California, and Reductions in Force blogs as additional information becomes available.

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Quick Hits

• The DEA’s chief administrative law judge stayed marijuana rescheduling proceedings to consider adding a new GAO drug scheduling report to the hearing record and permit supplemental briefings concerning rescheduling all marijuana products, not just those approved by the FDA.
• Federal agencies must respond by October 13, 2026. After that, the judge will decide whether to admit the GAO report.
• Forty states and Washington, D.C., have legalized medical marijuana, and twenty-four states and Washington, D.C., have legalized recreational marijuana for adults.

Under the Controlled Substances Act (CSA), the federal government classifies drugs into five schedules based on accepted medical uses, potential for abuse, and potential for addiction. Schedule I drugs are deemed to have no accepted medical use and a high potential for abuse. This includes LSD, ecstasy, and heroin. Schedule III drugs are deemed to have an accepted medical use and moderate to low potential for physical and psychological dependence. This includes some pain medications, ketamine, and anabolic steroids.

The U.S. Food and Drug Administration (FDA) provides scientific and medical analyses that inform federal drug scheduling decisions, and the DEA makes the final classification decisions.

Federal Actions

On December 18, 2025, President Donald Trump signed an executive order directing the attorney general to reschedule marijuana from a Schedule I to a Schedule III drug. Rescheduling marijuana would not legalize it for recreational or medicinal use, but it would loosen restrictions on research of the drug as a potential treatment for certain medical conditions, such as anxiety, insomnia, post-traumatic stress disorder, chronic pain, and nausea from chemotherapy.

On April 28, 2026, the DEA published a final rule to place “drug products containing marijuana that have been approved by the FDA” and “marijuana subject to a state medical marijuana license” in Schedule III. That final rule took effect immediately.

In June and July 2026, the DEA Office of Administrative Law Judges held hearings on whether to move all marijuana products, including those for recreational use, to Schedule III, and whether to leave “medical marijuana” and “FDA-approved” marijuana on Schedule III.

GAO Report

The GAO report noted that the FDA lacked formal policies and procedures specifying how its staff should evaluate drugs and develop scheduling recommendations.

The report provides three recommendations:

• The administrator of the DEA should develop policies and procedures that identify DEA’s roles, responsibilities, and protocols for evaluating and scheduling substances.
• The commissioner of the FDA should develop policies and procedures that staff are to follow when completing evaluations and developing scheduling recommendations, including the criteria for determining a substance’s potential for abuse relative to other substances.
• The commissioner of the FDA and the director of the National Institutes of Health (NIH) should update their memorandum of understanding concerning developing drug scheduling recommendations.

GAO did not recommend against rescheduling marijuana or conclude that the FDA’s marijuana evaluation was flawed.

Next Steps

The administrative law judge will issue an opinion, followed by an opportunity for the parties to file exceptions and a review by the DEA administrator. After that, the DEA could publish a proposed rule with a comment period before a final rule is published. Certain parties could potentially challenge the final rule in federal court.

Employers may wish to review their policies and practices to ensure compliance with local and state laws regarding workplace drug testing and disability accommodations for employees who are medical marijuana cardholders. The state laws vary widely. Employers are still legally permitted to maintain a drug-free workplace and fire or discipline a worker for consuming cannabis or being intoxicated at the workplace.

Employers may want to monitor any regulatory developments and guidance from the U.S. Department of Transportation (DOT), the DEA, and the U.S. Department of Health and Human Services (HHS). If marijuana is rescheduled, potentially the biggest change for employers could be in the transportation industry.

Ogletree Deakins’ Drug Testing Practice Group will continue to monitor developments and will post updates on the Drug Testing, Healthcare, and Trucking and Logistics 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.

M. Tae Phillips is a shareholder in Ogletree Deakins’ Birmingham office and co-chair of the Drug Testing Practice Group.

Michael S. O’Malley is an associate in Ogletree Deakins’ Stamford office.

Jennifer L. Pacicco is an associate in Ogletree Deakins’ Philadelphia 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

• DHS is proposing a $70,000 fee for the first OPT recommendation for an F-1 student and a $30,000 fee for any subsequent OPT recommendation, including a STEM OPT extension.
• The SEVP-certified school would be responsible for paying the applicable fee before the designated school official could enter the OPT recommendation in the Student and Exchange Visitor Information System, but DHS acknowledges that schools may pass the cost on to students or employers.
• Public comments on the proposed rule will be accepted through November 9, 2026, and comments on the related information collection are due by December 7, 2026.

Under the proposal, schools certified by the Student and Exchange Visitor Program (SEVP) would be required to pay $70,000 for a student’s initial OPT recommendation and $30,000 for a subsequent OPT recommendation, which could total $100,000 for a student who completes initial OPT and later receives a STEM OPT extension.

Proposed OPT Fee Structure

Under the proposed rule, an SEVP-certified school would pay a one-time $70,000 fee the first time it recommends a student for any type of OPT, whether pre-completion or post-completion, and $30,000 for each subsequent OPT recommendation, including a STEM OPT extension (an additional work authorization period for qualifying STEM graduates). Payment of each fee would be required before the designated school official (DSO) issues the Form I-20 reflecting the recommendation. The fees would be triggered by the school’s OPT recommendation, not by a particular employer or a change in employment, and the proposal does not affect Curricular Practical Training (CPT). A student who receives twelve months of post-completion OPT followed by a STEM OPT extension could therefore generate $100,000 in total fees. Splitting OPT between pre-completion and post-completion periods would also generate $100,000 ($70,000 plus $30,000), and DHS expects schools to steer students toward post-completion OPT only. DHS is also seeking comment on an alternative under which the $70,000 initial fee would apply again when a student begins OPT at a higher degree level.

OPT currently provides eligible F-1 students with up to twelve months of work authorization related to their fields of study at each education level, while qualifying STEM graduates may receive an additional twenty-four months. STEM OPT also carries employer compliance obligations, including E-Verify participation, completion of the Form I-983 Training Plan, and wage and working condition attestations.

The proposal follows other recent DHS actions affecting F-1 students. On July 17, 2026, DHS published a final rule that would replace duration of status (D/S) admission for F, J, and I nonimmigrants with fixed periods of admission. On September 14, 2026, the day before the rule was scheduled to take effect, the U.S. District Court for the District of Massachusetts issued a nationwide preliminary injunction blocking its implementation. The government has appealed, but the rule remains blocked while the litigation continues, and F-1 students continue to be admitted under the existing D/S framework.

Schools Would Be Responsible for Payment but Can Pass Costs On

The proposed fees would be paid by the SEVP-certified educational institution. The school would have to pay the applicable fee before the DSO could enter the OPT recommendation in the Student and Exchange Visitor Information System (SEVIS) and issue an updated Form I-20 (the student’s Certificate of Eligibility for Nonimmigrant Student Status). U.S. Citizenship and Immigration Services (USCIS) would not grant employment authorization until the fee had been paid. DHS states that schools “may pass the financial obligation of this proposed fee onto F-1 nonimmigrant students, all students, or employers,” and the proposal places no specific limits on how schools source the funds, as long as they follow other laws, such as federal foreign gift and contract reporting. Fee recovery approaches will also likely be shaped by other laws, such as state consumer protection or tuition rules, and by the terms of enrollment agreements. Schools could request a refund, at SEVP’s discretion and on a case-by-case basis, only if the student has not received an employment authorization document for the associated OPT. The DSO would first have to remove the OPT recommendation from SEVIS. Refund determinations would be final and not subject to administrative appeal.

DHS estimates that the proposed fees could generate approximately $8.4 billion to $16.5 billion annually, with a primary estimate of approximately $12.4 billion after the first year. DHS acknowledges that the fees could reduce OPT and STEM OPT participation, because some schools may decline to pay the fee.  

Next Steps

Public comments will be accepted through November 9, 2026, and comments on the related information collection are due by December 7, 2026. Once the comment periods close, DHS will review the comments before publishing any final rule. The rule, if finalized, will take effect sixty days after publication. The substance, timing, and implementation of the rule may change during the rulemaking process.

For now, there is no new OPT fee in effect, and existing OPT and STEM OPT procedures remain in place.

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

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Quick Hits

• English-only workplace rules are generally impermissible but may be lawful in situations where they’re required for safe or efficient business operations.
• The EEOC recently released a video indicating an intent to increase its enforcement focus on national origin discrimination against Americans and English speakers.
• The EEOC has prioritized its efforts on protecting American workers from “anti-American national origin discrimination.”

Background

Title VII of the Civil Rights Act of 1964 protects workers from employment discrimination based on national origin. The scope of this protection includes employees born outside the United States, as well as U.S.-born workers and those with ancestors born in the United States. According to the U.S. Equal Employment Opportunity Commission’s (EEOC) enforcement and litigation statistics, in fiscal year (FY) 2025, the agency received 7,856 charges alleging national origin discrimination (8.9 percent of all charges received in FY 2025) and had 1,250 merit resolutions involving national origin discrimination.

The EEOC considers an individual’s primary language “often an essential national origin characteristic.” While employers may require English in certain situations, such as when speaking only English is needed to ensure safe and efficient communication for specific tasks, an employer’s English-only rule must be justified by business necessity and enforced for nondiscriminatory reasons. In general, it’s unlawful for an employer to require workers to speak only English during rest breaks, meal breaks, or other off-duty times.

Pivot in Enforcement Priorities

On June 4, 2026, the EEOC approved a new National Enforcement Plan, signaling the agency’s pivot away from pursuing disparate-impact theories of discrimination in investigations. Five days later, on June 9, 2026, the U.S. Department of Justice (DOJ) issued a concurrent opinion letter stating that the EEOC’s existing guidelines regarding disparate-impact liability were inconsistent with Title VII and unconstitutional. This policy posture aligned with EEOC plans to “increase[e] enforcement of employment antidiscrimination laws against employers that illegally prefer non-American workers.”

The agency has indicated a move away from its long-standing intention to advance disparate-impact claims (i.e., claims of liability based on facially neutral employment practices that disproportionately affect members of protected groups), including such claims related to language and national origin. Fourteen states, however, recently reaffirmed their commitment to enforcing civil rights laws under disparate-impact theories.

On September 14, 2026, the EEOC posted a video of EEOC Chair Andrea Lucas encouraging workers to contact the EEOC if they believed they had suffered discrimination based on speaking English or being American.

“Maybe you were laid off and told to train an H-1B or other guest worker visa holder who replaced you. Or maybe your manager or coworkers excluded you from conversations because you speak English or moved work discussions into another language or even onto a foreign messaging app,” Lucas said in the video. “Have you been harassed at work for speaking English or for being too American? Or has your employer preferred workers of one foreign national origin to serve customers with that same background?”

Next Steps

Going forward, the EEOC is likely to pursue more cases alleging national origin discrimination against American employees and English speakers.

If an employer wishes to adopt an English-only rule for nondiscriminatory reasons—for specific times, spaces, or job duties—it generally must inform its affected employees about when the rule applies and what the consequences will be for violating it. Documenting the business necessity for the rule may help to defend against discrimination claims. Customer preferences, manager preferences, and general workforce morale are typically not considered legitimate business reasons under Title VII.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance and Employment Law 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.

Stephen J. Quezada is a shareholder in Ogletree Deakins’ Houston 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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