Quick Hits

• On July 22, 2026, the California Occupational Safety and Health Standards Board released a revised draft workplace violence prevention regulation that clarifies and narrows employer-provided transportation to only include “employer-provided transportation under the employer’s control.”
• The revised draft regulation no longer includes the previous exception to “Threat of Violence” that provided “The employer is not responsible for texts, electronic messages, or personal social media that are not brought to the attention of the employer or that the employer could not otherwise be reasonably aware of.”
• The new draft states that an employee assistance program would satisfy the requirement to offer or make available individual trauma counseling.

The draft regulation would continue to require a workplace violence prevention plan with:

1. the name or job title of the person responsible for the plan;
2. procedures for active involvement of employees in developing and implementing the plan;
3. coordination of the plan with other employers at their worksites;
4. procedures to respond to reports of workplace violence;
5. compliance procedures;
6. communications methodologies for the plan, including reporting workplace violence and communicating investigation results;
7. procedures for responding to emergencies;
8. training procedures;
9. procedures for identifying and evaluating workplace violence hazards;
10. methodology for correcting workplace violence hazards;
11. post-incident response procedures and investigation actions; and
12. procedures for review and evaluation of the workplace violence prevention plan.

The draft regulation clarifies and narrows employer-provided transportation to only include “employer-provided transportation under the employer’s control.”

The draft regulation clarifies the “work practice controls” example related to staffing levels. Now, appropriate staffing levels would be “based on the employer’s workplace violence hazard assessment” required under the employer’s plan.

The Standards Board added feasibility language to the section on engineering and work practice controls.

The Standards Board also removed the reference to stalking as a workplace violence hazard. According to the materials, stalking will be listed in a future California Occupational Safety and Health Administration (Cal/OSHA) guidance document along with other examples of workplace violence.

The section that would require employers to offer or make available individual trauma counseling remains despite many employer concerns. The new draft states that an employee assistance program would satisfy the requirement to offer counseling.

The Standards Board will accept comments through August 17, 2026, and then provide a final version for the notice and subsequent vote. A vote approving the final draft standard is expected for the fall or winter with an implementation date of January 1, 2027.

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Quick Hits

• On August 3, 2026, the State Department published a final rule, effective immediately, that establishes a permanent visa bond program.
• The rule allows consular officers to require certain B-1/B-2 visa applicants from designated countries to post bonds of $10,000, $15,000, or $20,000 based on an applicant’s individual circumstances.
• A visa bond may be forfeited if the visa holder violates the bond’s terms and conditions, including by overstaying or seeking asylum or other humanitarian protection while in the United States.

Under the program, which takes effect immediately, consular officers may require applicants who are nationals of designated countries to post a cash bond of up to $20,000 as a condition of visa issuance to help ensure they maintain nonimmigrant status and depart the United States as required.

Background

The final rule permanently establishes the visa bond program that was piloted in August 2025 pursuant to Executive Order 14159, Protecting the American People Against Invasion. According to the State Department, the pilot program was intended to encourage foreign governments to reduce visa overstay rates, improve information sharing, and strengthen identity verification and screening practices.

The department reported that the pilot program covered fifty countries and significantly reduced overstays among travelers who posted visa bonds. Based on those results, the department concluded that the program was an effective tool for promoting compliance with the terms of B-1/B-2 visas.

Covered Countries

The program applies to B-1/B-2 visa applicants who are nationals of countries designated by the State Department based on factors such as visa overstay rates, information-sharing practices, identity verification, and screening and vetting capabilities. Countries participating in the visa waiver program are excluded.

Visa Issuance and Bond Requirements

If the required bond is posted and the applicant is otherwise eligible, a consular officer may issue a single- or multiple-entry visa valid for three to twelve months, depending on visa reciprocity. Bonded travelers must enter and depart the United States through commercial airports of entry, including U.S. Customs and Border Protection (CBP) preclearance locations.

Bond amounts will be returned if the visa holder complies with the terms of the visa and bond. However, the full bond amount will be forfeited if the individual substantially violates the bond conditions, including by overstaying the authorized period of admission or filing for asylum or other humanitarian protection. Although a timely request for an extension of stay or change of status is not itself a bond violation, U.S. Citizenship and Immigration Services (USCIS) may consider the existence of a visa bond as a negative discretionary factor when adjudicating those requests.

The rule does not establish a formal process for requesting a waiver of the bond requirement. However, the assistant secretary for consular affairs, or a designee, may waive the requirement for an individual applicant, a category of applicants, or an entire country if doing so would not be contrary to the national interest.

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

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Quick Hits

• A government contractor code of business ethics and conduct addresses risks and compliance obligations specific to government work such as procurement integrity, accurate billing, conflicts of interest, mandatory inspector general (IG) disclosure.
• Although the code is mandatory for contracts and subcontracts over $7.5 million with performance periods exceeding 120 days, the FAR recommends one for all contractors.
• A general corporate ethics policy may not cover these government-specific topics. The two documents serve different purposes, potentially leaving the company exposed to significant compliance risks.
• If an instance of noncompliance occurs in performance of a government contract or subcontract, having a code in place can help mitigate significant penalties; DOJ and the U.S. Sentencing Guidelines treat a functioning compliance program as a factor in their assessment.

Most companies already have a general ethics or compliance policy covering topics like workplace harassment, data privacy, and insider trading. But those policies may not address government-specific risk areas. Companies may assume their existing ethics program covers government contracting conduct, when in practice it does not. This article explains what a government contractor code of business ethics and conduct is, where it comes from in the Federal Acquisition Regulation (FAR), and why companies increasingly maintain one as a matter of good governance.

What the Code Is and Where It Comes From

The code is a written set of standards governing ethical conduct in connection with government contract performance. It is paired with an awareness and compliance program (training, reporting mechanisms, monitoring) and an internal control system. Together, these form the compliance infrastructure the government expects from its contractors. The substantive policy on contractor ethics lives in FAR Subpart 3, titled “Improper Business Practices and Personal Conflicts of Interest,” specifically in Subpart 3.10. This is where the government articulates what it expects from contractors and subcontractors in terms of ethics programs. Separately, FAR Part 52 contains the actual contract clauses that get incorporated into government contracts. The clause in FAR 52.203-13, “Contractor Code of Business Ethics and Conduct,” is the mechanism that implements the Part 3 policy as a binding contract term. When a contractor sees this clause in its contract or subcontract, it is the regulatory expectation from Subpart 3.10 taking effect as a contractual obligation.

The code becomes a mandatory contract or subcontract requirement when a contract or subcontract is expected to exceed $7.5 million and has a performance period of more than 120 days. There are limited exceptions for certain commercial product or service contracts and contracts performed entirely outside the United States. When the clause applies, the company must have a written code in place within thirty days of award. Below that threshold, the FAR still recommends a code as a best practice for all companies performing government work. Specifically, FAR 3.1002 mandates that “[g]overnment contractors must conduct themselves with the highest degree of integrity and honesty,” and they “should have a written code of business ethics and conduct.” The regulation further advises that, “[t]o promote compliance with such code of business ethics and conduct, contractors should have an employee business ethics and compliance training program and an internal control system” that is “suitable to the size of the company and extent of its” federal contract portfolio. The recommendations reflect the reality that the underlying compliance risks unique to the federal marketplace exist on government contracts or subcontracts of any size.

How This Differs From a General Corporate Ethics Policy

Many companies already maintain a general code of ethics or corporate compliance policy. While valuable, these policies serve a different purpose. A general ethics policy typically addresses broad workplace topics: anti-harassment, workplace safety, data privacy, insider trading, and general anti-corruption. These are designed for companywide application across all business lines.

The FAR-driven code has a narrower focus. It addresses risk areas specific to government contracting: accurate representations in proposals and invoices, procurement integrity (protecting nonpublic bid and source selection information), anti-bribery and anti-kickback requirements, personal and organizational conflicts of interest, post-government employment restrictions, antitrust and fair competition rules, government cost accounting and timekeeping accuracy, protection of government property and data, and the mandatory IG disclosure obligation.

A general ethics policy may not address procurement integrity, organizational conflicts of interest, government cost accounting rules, or a disclosure obligation to a federal inspector general. These are distinct, specific regulatory areas that require their own treatment.

Why Companies Adopt a Code Voluntarily

Many companies maintain a FAR-compliant code even when their contracts or subcontracts fall below the mandatory threshold. A written code provides employees with clear guidance on the compliance risk areas unique to government contracting and establishes internal reporting channels and creates a framework of documented controls to mitigate that risk. The False Claims Act imposes treble damages plus per-claim penalties and those penalties are assessed per claim rather than as a percentage of contract value. A single inaccurate certification, overbilled invoice, or falsified timesheet on a relatively small contract invokes the same statutory framework as a billing error on a multibillion dollar program. This means that any company submitting claims to the federal government operates within the False Claims Act’s reach, regardless of whether its contracts cross the FAR’s dollar threshold for mandatory adoption of a code.

In the event a compliance risk is realized during the performance of a government contract or subcontract the prior adoption of a code can mitigate the consequences to the company. Both the U.S. Sentencing Guidelines for organizations and the U.S. Department of Justice’s (DOJ) Evaluation of Corporate Compliance Programs identify specific hallmarks of an effective compliance program. These include leadership commitment, written standards, a designated compliance officer, training, confidential reporting channels, nonretaliation, monitoring and auditing, and consistent discipline. These are the same programmatic components that FAR 52.203-13 requires. The overlap is by design. Companies that maintain these processes, whether voluntarily or by contractual mandate, are better aligned with the frameworks DOJ uses during charging decisions, sentencing, and suspension or debarment proceedings. Both the Sentencing Guidelines and DOJ’s published guidance apply these expectations without regard to company size or government contract volume.

FAR 52.203-13 defines when a written code becomes a contractual obligation. It does not define when the underlying risks appear or when other regulatory frameworks begin to look for compliance infrastructure. For companies that participate in the government marketplace at any level, a code addressing these specific risk areas represents a straightforward alignment of internal processes with existing regulatory expectations.

Ogletree Deakins’ Government Contracting and Compliance Practice Group will continue to monitor developments and will post updates on the Government Contracting and Compliance blog as additional information becomes available.

Ogletree Deakins has developed a template code of ethics and implementation guidance for federal contractors. To find out more, please contact Joseph E. Ashman or the Ogletree attorney with whom you work.

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Quick Hits

• The Third Circuit recently signified a different approach than other circuits in evaluating cases alleging Title IX sex discrimination than do other circuits at the motion to dismiss stage.
• The Third Circuit clarified that the “straightforward pleading standard” it applies to Title IX claims at the motion to dismiss stage is whether the “alleged facts, if true, support a plausible inference that a federally funded college or university discriminated against a person on the basis of sex.” The court’s standard differs from that of other circuit courts that apply doctrinal tests, such as erroneous outcome, selective enforcement, or deliberate indifference.
• The court recognized that its standard required more than the one used by the Second Circuit, which the opinion described as “requiring only facts supporting a minimalplausible inference of discriminatory intent.”

Title IX of the Education Amendments of 1972 prohibits sex discrimination in colleges and universities that receive federal funding.

Applying its “plausible inference standard” in Doe v. Princeton University, the Third Circuit found that the total mix of allegations in the complaint alleged a plausible inference of sex discrimination sufficient to survive a motion to dismiss.

Background on the Case

The lawsuit was brought by a male student, referred to as John Doe, who received a two-year suspension under the university’s disciplinary policy for violations of its Public Safety Policy, after he was accused by two women (a student and her friend who was not a Princeton student) of choking them in March 2023 and April 2023.

Subsequently, Doe filed an internal appeal on the grounds that the disciplinary procedures were not “fair and reasonable,” and the penalty did not “fall within the range of penalties imposed for similar misconduct.” He argued that Princeton’s investigator treated male and female witnesses differently, and that the hearing was improperly rushed. Princeton’s appeal panel denied the appeal.

Then Doe sued Princeton, alleging sex discrimination under Title IX, as well as breach of contract, breach of the implied covenant of good faith and fair dealing, and gross negligence under New Jersey state law. He claimed there was sex-based pressure on Princeton to favor women accusing men of assault. He claimed the university failed to consider testimony from a male student at a different university, who said one of Doe’s accusers also made false choking accusations against him. Doe also argued that, during the hearing, the committee prejudged him as responsible and interpreted all discrepancies and inconsistencies in the accusers’ favor. (In the Title IX context, a respondent can be determined to be responsible, based on an evaluation of all the evidence, using either the preponderance of the evidence or clear and convincing evidence standard. Notwithstanding, until an investigation has concluded, a respondent is presumed not responsible.) One professor on the committee fell asleep during the hearing.

On April 28, 2025, the U.S. District Court for the District of New Jersey dismissed Doe’s claims. It concluded that Doe’s arguments did not show that Princeton’s disciplinary process reflected bias against men. “None of [the] plaintiff’s allegations about the investigation or adjudication support a plausible inference that the university discriminated against him based on sex,” the court stated. It rejected Doe’s arguments that the investigation was unfair and that the university breached his contract by not following its own established procedures for internal investigations and hearings.

Third Circuit’s Ruling

The Third Circuit reversed the district court. Initially, the court observed that Title IX applied to Doe’s claims, even though the university used its public safety policy to assess discipline, rather than its sexual misconduct policy. The court noted that “[u]niversities cannot insulate themselves from Title IX liability by recharacterizing disciplinary complaints that, on their face, indicate the alleged misconduct is of a sexual nature and adjudicating those charges under disciplinary policies with lower procedural protections for respondents.”

The court concluded that the “total mix” of allegations in Doe’s complaint were sufficient to support an inference of sex discrimination, if proven true. “The complaint alleges a series of procedural irregularities—including an imbalanced investigation and hearing, gender-based credibility determinations, and a decision against the weight of the evidence—that are commonly recognized in case law as indicative of gender bias, as well as statements evincing prejudgment by the decision-makers,” it stated. The court held that the same evidence supported Doe’s breach of contract claims.

The court rejected any requirement that plaintiffs use one of the specific doctrinal tests that other circuits have used to classify Title IX theories, including erroneous outcome, selective enforcement, or deliberate indifference. Rather, it ruled that plaintiffs remain “free to characterize their claims however they wish.”

Key Takeaways

This Third Circuit opinion is important in that it sets forth and clarifies the standards for stating sex discrimination claims, regardless of whether underlying discipline was handled under policies prohibiting sexual misconduct or harassment on campus or under other procedures. The Third Circuit recognized the challenge that universities face in balancing the interests of students who report misconduct and those of students accused of misconduct. The court stated that these interests “can coexist when universities employ fair disciplinary procedures to seek truth and accountability.” According to the court, universities must “accommodate both the vital protection of victims’ rights and the essential fairness owed to respondents.”

Whether following Title IX sexual misconduct policies or other disciplinary policies, universities can expect plaintiffs to bring claims alleging sex discrimination under Title IX. Under the Third Circuit’s “plausible inference” standard, such claims may be difficult to dispose of at the motion to dismiss stage.

Title IX is a heavily regulated area, so schools may want to ensure they continuously review and follow both school procedures and regulatory requirements. Conducting a fair investigation and consistently enforcing university policies may reduce the risk of sex discrimination lawsuits. Unbalanced application of disciplinary decisions may create additional liability under Title IX.

Ogletree Deakins’ Higher Education Practice Group will continue to monitor developments and will post updates on the Delaware, Higher Education, New Jersey, Pennsylvania, and Workplace Investigations and Organizational Assessments blogs as additional information becomes available.

Karen Baillie is a shareholder in Ogletree Deakins’ Pittsburgh office.

Stesha A. Emmanuel is a shareholder in Ogletree Deakins’ Boston office and also practices in Rhode Island.

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

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Court Blocks $100,000 H-1B Fee While Appeal Proceeds. On July 24, 2026, the U.S Court of Appeals for the First Circuit denied the Trump administration’s request to stay, pending appeal, a June 8, 2026, decision by the U.S. District Court for the District of Massachusetts that struck down President Donald Trump’s September 2025 $100,000 H-1B proclamation. The court of appeals denied the stay request, finding that the administration had failed to make a strong showing of a likelihood of success on the merits of the appeal. Like the district court, the court of appeals determined that the presidential proclamation and its implementing materials exceeded the authority granted to the executive branch by Congress, as no provision of the Immigration and Nationality Act “references the imposition of the kind of payment requirement at issue.” Accordingly, the federal government is prohibited from collecting the $100,000 fee while the administration’s merits appeal continues. Katherine C. MacIlwaine, Nicole Fink, and Kara Goray have the details.

Senate Committee Approves Sonderling for Permanent Labor Secretary Role. On July 30, 2026, the U.S. Senate Committee on Health, Education, Labor and Pensions advanced the nomination of Keith Sonderling to be Secretary of Labor. Sonderling continues to serve as the acting secretary of labor, a role he assumed in April 2026 upon the resignation of former Labor Secretary Lori Chavez-DeRemer. Sonderling is an attorney who previously served as a Commissioner on the U.S. Equal Employment Opportunity Commission and in the U.S. Department of Labor’s Wage and Hour Division. Sonderling’s understanding of the current policy issues facing employers has earned him the support of the business community.

Senate Tees Up Vote on NLRB Nominees. National Labor Relations Board (NLRB) nominees James Macy and David Prouty are moving closer to Senate confirmation. This week, Senate Majority Leader John Thune (R-SD) included Macy’s and Prouty’s nominations in a package of seventy-four nominations scheduled to be voted on “en bloc” by the U.S. Senate during the legislative week beginning August 3, 2026. Because executive branch nominations require confirmation by a majority vote, not the sixty-vote threshold required for most legislation, the package of nominations is expected to be approved.

NLRB Drops Challenge to New York State Law’s Tenuous Jurisdictional Mantle. This week, the NLRB withdrew its lawsuit challenging a New York law that had granted the state’s Public Employment Relations Board jurisdiction over private-sector labor matters. The law was enacted as a local response to the NLRB’s lack of a quorum that had persisted for much of 2025. This week’s action—a stipulated dismissal agreed to by all parties–comes after a different federal court in New York permanently enjoined the state from enforcing the law, which was preempted by the National Labor Relations Act. NLRB General Counsel Crystal Carey stated in a press release on July 27, 2026, that “attempts to override NLRB jurisdiction through state law are clearly preempted by federal labor law.”

TPS Fallout Continues. Regulators and lawmakers continue to respond to the Supreme Court of the United States’ recent decision in Mullin v. Doe, in which the Court ruled that the Trump administration’s decisions to terminate temporary protected status (TPS) designations were unreviewable by the courts as to non-constitutional claims. Here is the latest:

• Work Authorization Expiration. U.S. Citizenship and Immigration Services (USCIS) has been issuing updates on TPS employment authorization expiration dates. This week, work authorization through TPS expired for individuals from Haiti and Syria. Work authorization is scheduled to expire for individuals under TPS designation for Somalia and Burma (Myanmar) on August 3, 2026, and for South Sudan and Ethiopia on August 6, 2026. These dates are subject to change, so impacted employers and workers should continue to monitor USCIS for further updates.
• Legislative Activity. Congresswoman Sylvia R. Garcia (D-TX) has introduced a discharge petition to force a floor vote on the American Dream and Promise Act of 2025 (H.R. 1589) in the U.S. House of Representatives. Among other provisions, the American Dream and Promise Act would allow beneficiaries of TPS to apply for lawful permanent resident status under certain conditions. Two hundred-eighteen signatures are needed to force a vote on the bill, and 210 representatives—including two Republicans—have signed the discharge petition. A previous version of the American Dream and Promise Act passed the House in March 2021.

SCOTUS Rules on Enemy Combatants. Eighty-four years ago today, the Supreme Court issued its decision in Ex Parte Quirin, a landmark ruling concerning the use of military tribunals to prosecute enemy combatants. The World War II–era case concerned eight German men (two of whom were U.S. citizens)—military intelligence agents—who were transported by German submarines to beaches in New York (specifically, Amagansett Beach, Long Island) and Florida (Ponte Vedra Beach).

Upon making their clandestine landings and coming ashore, the men discarded their German military uniforms and changed into civilian clothes. Their mission was to sabotage U.S. military manufacturing facilities. Captured before they could carry out their plans, the men were tried before a seven-member military tribunal established by President Franklin D. Roosevelt. During the trial, the Germans’ appointed counsel argued that the men should instead be tried in the civilian court system. This argument went all the way to the Supreme Court, which ruled unanimously that the military tribunal was constitutional. Chief Justice Harlan Stone wrote:

[O]ur Government has likewise recognized that those who during time of war pass surreptitiously from enemy territory into our own, discarding their uniforms upon entry, for the commission of hostile acts involving destruction of life or property, have the status of unlawful combatants punishable as such by military commission.

The tribunal continued, and all eight men were found guilty and sentenced to death, though FDR commuted the sentences to time in prison for two of the conspirators who cooperated in the investigation. Ex Parte Quirin went on to play a prominent role in the underlying legal theory behind the post-9/11 enemy combatant terrorist cases.

Quick Hits

• The DOL has proposed a rule that would add an additional electronic disclosure safe harbor modeled on the 2020 “notice and access” safe harbor for pension benefit plans.
• The proposed rule would apply to “group health plans” and would affect approximately 2.7 million ERISA-covered group health plans—but not other welfare benefit plans—covering about 134 million participants.
• The safe harbor would provide a clearer compliance path, but electronic delivery may not be a complete defense, if, for example, there are notice defects or undeliverable emails.

That safe harbor, along with estimates of employer savings of up to $3.9 billion over the next decade, was published in the Federal Register on July 23, 2026. If finalized as proposed, the earliest the rule could become effective is January 1, 2027. Plan sponsors can use the period before any final rule takes effect to align vendor contracts, notice inventories, and recordkeeping practices with the proposed safe harbor and potential litigation defenses.

Background

Current DOL rules established in 2002 generally allow electronic delivery of Employee Retirement Income Security Act (ERISA) disclosures only to participants who are “wired at work” (i.e., who have access to the employer’s electronic information system as an integral part of their duties) or who provide affirmative consent. As a result, plans may need to make individualized eligibility determinations and deliver paper to more participants. In 2020, the DOL finalized a default “notice and access” safe harbor for retirement plans, allowing plan administrators to post pension benefit plan documents online and notify participants by email, without requiring prior consent. The 2026 proposed safe harbor would extend that model to group health plans, modified for health plan privacy concerns.

Covered Individuals and Covered Documents

The safe harbor would be available to provide notice to “covered individuals”—participants, beneficiaries, and other individuals entitled to health plan documents who provide an electronic address (email or mobile number) to the employer, plan sponsor, or administrator, or who have been assigned one by the employer for employment purposes. Adult dependent children could also receive documents electronically if they have provided an electronic address.

“Covered documents” would encompass any document or information the administrator must furnish under Title I of ERISA, including documents that need only be furnished upon request (e.g., under ERISA section 104(b)(4)). This is broader than the 2020 pension safe harbor, which excludes upon-request documents. The proposal could apply to many recurring health plan disclosures, including SPDs, summaries of material modifications (SMMs), COBRA notices, and claims notices.

No Direct Email Delivery

Unlike the 2020 retirement plan safe harbor, the proposed group health plan rule would not permit direct email delivery of covered documents. EBSA cited privacy concerns regarding protected health information (PHI) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Instead, group health plan administrators would be required to maintain a website where documents can be accessed and would have to furnish a notice of internet availability (NOIA) alerting covered individuals when documents are posted.

Notice of Internet Availability (NOIA)

The proposed rule would require the administrator to furnish a NOIA each time a covered document is posted to the website (or, for combined annual notices, once per plan year, no more than fourteen months after the prior notice). Each notice would be required to include all of the following:

• A prominent statement: “Disclosure About Your Health Plan”
• A statement that important information about the health plan is now available for review
• Identification of the covered document by name
• The website address or hyperlink where the document can be accessed
• A statement of the right to request a free paper copy and instructions for doing so
• A statement of the right to opt out of electronic delivery entirely, free of charge, and how to exercise that right
• A caution that the document need not remain posted for more than one year (or until superseded)
• A telephone number for the plan administrator

Plans generally would send a separate notice when a covered document is posted, although the proposal would allow certain annual or enrollment-related disclosures to be addressed through a combined annual NOIA. Like other participant notices, this would need to be written so that the average plan participant can understand it.

Website Standards

The proposed safe harbor would also impose specific website standards. Covered documents would have to be posted no later than the date otherwise required for furnishing under ERISA, remain available for at least one year (or until superseded), be presented in a manner understandable to the average participant, and be in a widely available format suitable for online reading and printing (e.g., PDF). Documents would also have to be electronically searchable and permanently retainable or downloadable. The administrator would be required to take measures to protect the confidentiality of personal information on the site.

Paper Notice Requirements

Before relying on the new safe harbor, administrators generally would be required to furnish a paper initial notice describing that documents will be delivered electronically, identifying the electronic address to be used, providing access instructions, and reiterating paper-copy and opt-out rights. Specifically, covered individuals would retain the right to request a free paper copy of any covered document at any time. They may globally opt out of electronic delivery entirely, free of charge.

What to Consider Now

The rule is only proposed, but plan sponsors and administrators may want to begin evaluating whether their current disclosure practices would qualify for the new safe harbor if it is finalized. For example:

• when entering into new agreements or amendments with health plan service providers, ensuring that the agreements allow for the use of any new safe harbor disclosure method once finalized;
• inventorying required group health plan disclosures and current delivery methods;
• confirming which participant populations have valid employer-assigned or provided electronic addresses;
• reviewing benefits portals, vendor websites, and mobile applications for access, search, print, retention, and privacy functionality;
• developing procedures for paper-copy requests, opt-outs, undeliverable notices, and post-employment address updates;
• confirming that vendors can maintain records of delivery, bounces, opt-outs, paper requests, and document availability; and
• considering enhanced communications or acknowledgments for high-risk notices, including wellness or tobacco surcharge disclosures.

Although the safe harbor would be voluntary, failure to satisfy its conditions could leave sponsors to defend whether their disclosure practices were otherwise reasonably calculated to reach participants.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation blog as additional information becomes available.

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Quick Hits

• The D.C. Circuit’s July 2026 ruling in Trustees of the IAM National Pension Fund v. M&K Employee Solutions affirmed most of an $11.4 million withdrawal liability judgment against affiliated employee-leasing entities while reversing a $1.6 million delinquent contributions judgment because the pension fund failed to establish the full four-factor single-employer test beyond common ownership.
• Business owners participating in multiemployer pension plans face potential personal liability under the MPPAA’s controlled group provisions, though courts may exclude casual investment activity from the definition of a qualifying “trade or business,” and successor entities acquiring withdrawing employers’ operations may inherit withdrawal liability regardless of corporate restructuring.
• Employers withdrawing from multiemployer pension plans may want to carefully document applicable interest rates at the time of withdrawal, seek express written agreements on how partial payments will be allocated, and maintain genuine operational separateness among affiliated entities to reduce overall liability exposure and defend against single-employer claims.

Background

M&K Truck Centers operates twenty-eight truck dealerships through affiliated companies, each structured with a “Sales” entity to run the dealership and a separate “Employee Solutions” (ES) entity to hire workers and lease them back to the sales company. Three ES entities signed collective-bargaining agreements requiring contributions to the IAM National Pension Fund. When ES Alsip withdrew from the IAM National Pension Fund at the end of 2018, the pension fund assessed approximately $6.1 million in withdrawal liability. ES Alsip disputed the assessment and, contrary to the MPPAA’s “pay first, dispute later” rule, failed to make interim payments, prompting the IAM National Pension Fund to accelerate the payment schedule and sue. The pension fund also claimed that ES Summit owed approximately $1.6 million in delinquent contributions for work performed at a separate Northern Illinois dealership. The district court granted summary judgment for the pension fund on all claims and entered a $13 million judgment—comprising $11.4 million arising from ES Alsip’s withdrawal liability (including accrued interest and liquidated damages) and $1.6 million for ES Summit’s delinquent contributions. The court held multiple affiliated entities and individuals jointly and severally liable. On appeal, the D.C. Circuit affirmed in part and reversed in part, upholding the ES Alsip withdrawal liability but reversing the $1.6 million judgment against ES Summit.

(This matter is unrelated to the recent Supreme Court of the United States decision in M&K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, holding that, under ERISA, an actuary for an underfunded multiemployer pension plan may calculate an employer’s withdrawal liability based on actuarial assumptions adopted after the relevant measurement date for withdrawal liability.)

Key Takeaways

Personal Liability for Owners Hinges on ‘Trade or Business’ Analysis

Business owners and individuals with ownership interests in companies that participate in multiemployer pension plans may face potential personal liability. Under MPPAA’s control-group provisions, individuals engaged in a “trade or business” under common control with the withdrawing employer may be held personally liable for withdrawal liability. However, this case offers some reassurance: the court found that casual investment activity, such as occasional house-flipping treated on tax returns as personal transactions, may not constitute a “trade or business” sufficient to trigger personal liability. Owners may want to carefully document the nature of their outside business activities, and maintain a clear separation between personal investments and trade or business activities before withdrawal to assess personal liability exposure.

Controlled Group Liability Applies Automatically to Commonly Controlled Entities

For withdrawal liability, the MPPAA’s controlled group rule under 29 U.S.C. § 1301(b)(1) automatically treats all commonly controlled trades or businesses as a single employer. Common control (determined based upon level of ownership and/or voting interests for corporations) alone is sufficient. The pension fund need not prove interrelated operations, common management, or centralized control of labor relations. In this case, the court confirmed that the ES entities were commonly controlled and thus jointly and severally liable for ES Alsip’s withdrawal liability. The court also found “overwhelming evidence” that each employee-leasing entity was a single employer with its corresponding operating company, resulting in joint liability for pension obligations.

Successor Liability May Attach to Acquiring Entities

Successor companies that acquire operations from a withdrawing employer may inherit the withdrawing employer’s withdrawal liability. The court imposed vicarious liability on Laborforce, LLC, and Employee Services, Inc. (ESI) as successors to the ES entities. Employers considering acquisitions, reorganizations, or new corporate structures may want to conduct thorough due diligence on potential pension liabilities and structure transactions to minimize exposure to unintended liability.

Structuring Relationships With Unrelated Affiliated Entities

Employers using unrelated affiliated entities, such as staffing companies or employee-leasing arrangements, will want to consider how courts assess whether to treat separate entities as a “single employer” for pension purposes. For delinquent contribution claims (as opposed to withdrawal liability), some courts apply the National Labor Relations Board (NLRB) four-factor test, which considers interrelated operations, common management, centralized control of labor relations, and common ownership. Here, the appellate court reversed a $1.6 million judgment for delinquent contributions on summary judgment because the IAM National Pension Fund’s complaint alleged only common ownership between ES Summit and ES Northern Illinois, without demonstrating the other three factors. An employer may defend against single-employer claims by maintaining genuine operational separateness, separate management, distinct labor relations practices, and independent day-to-day operations. Conversely, courts will look beyond corporate formalities to the substance of the relationship.

Withdrawal Liability Interest Rates May Be Locked at Termination

This case provides employers withdrawing from a multiemployer pension plan an argument against increased interest rates imposed after the withdrawal. The court held that when an employer terminates its collective-bargaining agreement and withdraws from the fund, subsequent trust amendments raising interest rates cannot be applied to that employer’s withdrawal liability unless the original agreement expressly authorized such changes. This ruling benefits employers by providing potential certainty around withdrawal costs: once an employer withdraws, the financial terms in effect at that time may govern. Employers contemplating withdrawal may want to carefully document the applicable interest rate provisions and be prepared to challenge any retroactive increases.

Application of Partial Payments

Employers making partial payments on withdrawal liability may want to note that, absent an explicit agreement otherwise, a pension fund will typically apply those payments first to accrued interest rather than to the principal balance. This approach, known as the “United States Rule,” can significantly increase the total amount an employer ultimately pays. Employers negotiating payment terms with a pension fund may want to seek express written agreements specifying how payments will be allocated. A clear allocation agreement, applying payments to principal first or on a pro-rata basis, can reduce overall interest costs and provide greater certainty in financial planning.

Bottom Line for Employers

This decision reinforces several critical practices for employers to consider prior to withdrawing from a multiemployer pension plan. Because the structure of business operations can significantly impact how withdrawal liability is assessed and collected, individual owners can carefully evaluate whether their outside activities could be characterized as a “trade or business” that would expose them to personal liability under the controlled group rules. Employers considering acquisitions or business reorganizations can conduct thorough pension liability due diligence with a clear understanding of how the withdrawal liability rules operate and successor liability risks. Employers using unrelated affiliated entities can maintain genuine operational separateness to defend against single-employer claims. Prior to withdrawal, an employer can document applicable interest rates and be prepared to challenge any retroactive increases. When negotiating partial payment terms, employers can seek express agreements with the multiemployer pension fund specifying how payments will be applied to minimize total costs.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group and ERISA Litigation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation and Traditional Labor Relations blogs as additional information becomes available.

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Quick Hits

• A claim for damages based on termination-related fault may arise only if the employer’s serious breach of contract would have justified extraordinary termination without notice.
• An employer may be liable for misconduct among coworkers only if the employee acted as the employer’s vicarious agent, for example as a supervisor with authority to issue instructions, or if the conduct had a close factual connection to assigned job duties.
• Furthermore, the misconduct must have actually been the cause of the employee’s decision to resign.
• An employee’s extraordinary termination without notice must be received by the employer within two weeks after the employee becomes aware of the facts relevant to the termination.

The Case

The employee had been working shifts at a nursing home since 1987, most recently in the laundry department. In the summer of 2022, she and a coworker discovered a listening device there that had been hidden by a third coworker (Ms. B). Ms. B admitted to the incident and received a written warning. The employer changed the shift schedule in the laundry department so that the colleagues would no longer work together. In addition, the employer introduced a handover log for shift changes to prevent direct contact between the two. As a further measure, the employer commissioned an external mediator to resolve the conflict. However, the mediator’s attempt at mediation failed. As a result, the employee became permanently unable to work and, on March 11, 2024, resigned with immediate effect on grounds attributable to the employer, citing a medical certificate. On February 27, 2024, the plaintiff’s family physician certified that she suffered from a chronic adjustment disorder resulting from a workplace conflict, which prevented her from continuing to work for her employer. Subsequently, the plaintiff demanded approximately EUR 20,800 in damages and EUR 5,000 in compensation for pain and suffering from the employer. The Stralsund Labor Court dismissed the claim at first instance.

No Termination-Related Fault in Light of Adequate Crisis Management

The LAG upheld the dismissal of the complaint in its entirety. A claim for damages (pursuant to Section 628(2) of the German Civil Code (Bürgerliches Gesetzbuch (BGB)) requires misconduct on the part of the employer that would have justified an extraordinary termination without notice. This was lacking in the present case. The secret eavesdropping by the coworker could not be attributed to the employer. The coworker neither had authority to issue instructions to the plaintiff nor acted in connection with her job duties. Furthermore, the court found that the employer’s crisis management measures—separating shifts, maintaining a handover log, and engaging an external mediator—were sufficient to satisfy the employer’s duty of care toward its employees, even if the mediation ultimately proved unsuccessful. The court also clarified that the employer was not obligated to discharge the colleague who had eavesdropped: In principle, it is up to the employer to decide how to respond to conflicts, as long as the measures chosen are appropriate for resolving the conflict. In this case, the employer could reasonably assume this to be the case. Since the employer could not therefore be accused of any misconduct of its own, the claim for compensation for pain and suffering due to the mental illness was also unsuccessful.

Takeaways

Employers are obligated to protect their employees from health hazards (including psychological ones), bullying, discrimination, and other violations of personal rights. However, a claim for damages does not arise from every conflict among colleagues. In particular, employers are not directly liable for the conduct of employees who commit legal violations against other employees that are unrelated to business operations and outside their assigned duties. Rather, what is decisive is how an employer responds to breaches of duty that come to its attention. In practice, liability risks usually arise from an inadequate or delayed response.

The LAG’s decision illustrates that employer liability for coworker misconduct depends on attribution of the misconduct or on the employer’s own response after learning of the incident. In this case, the court considered the employer’s measures—shift separation, a handover log, and mediation—sufficient, and it did not require discharging the coworker who had secretly monitored the plaintiff.

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

Daniela Schumann is a senior associate in the Berlin office of Ogletree Deakins.

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

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Quick Hits

• Near-daily comments of a humiliating nature can satisfy the “severe or pervasive” standard for harassment.
• Second-hand harassment directed at a coworker of the same protected class can contribute to a plaintiff’s hostile work environment claim.
• Employers may want to ensure their investigations into harassment allegations are thorough and follow established procedures; missing files, uninterviewed witnesses, and testimony discrepancies can raise genuine disputes of material fact about the adequacy of an employer’s response.

Factual Background

The employee, a Black woman and naturalized U.S. citizen born in Ghana, worked as a registered nurse at the hospital. She was subject to a ninety-day probationary period after hire. The employee alleged that, almost from the beginning of her employment, Hispanic nurses in her unit discriminated against her and another Black nurse, including mocking African food and accents, making unflattering comments about Black employees, and expressing preferences for Filipino workers. The harassment allegedly occurred on nearly every shift.

The employee reported the conduct to her supervisors, who conducted an investigation she considered unsatisfactory. When her supervisors offered her a transfer to a different department, she declined. After her continued complaints, her supervisors allegedly retaliated by issuing informal “coachings,” formal disciplinary actions, and extending her probationary period, citing time management and patient care issues.

The employee was subsequently involved in a car accident. After an extended medical leave, the employee engaged in back-and-forth communications with the hospital about returning to work. After a delay in the hospital’s response, she mailed a letter advising of her “forced resignation,” citing discrimination, harassment, and retaliation.

The employee subsequently filed suit, asserting various claims, including hostile work environment harassment based on race under Title VII and Section 1981. The federal district court granted summary judgment for the hospital on all claims, and this appeal followed.

Legal Framework

To establish a hostile work environment claim under Title VII and Section 1981, a plaintiff must show that (1) she belongs to a protected group; (2) she was subjected to unwelcome harassment; (3) the harassment was based on her membership in a protected group; (4) the harassment affected a term, condition, or privilege of employment; and (5) the employer knew or should have known of the harassment and failed to take prompt remedial action.

The harassment must be “sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment.” Courts evaluate the totality of the circumstances, including the frequency of the conduct, its severity, whether it is physically threatening or humiliating versus merely offensive, and whether it unreasonably interferes with work performance.

To avoid liability, the employer’s response must be “reasonably calculated to end the harassment.” Prompt remedial action requires more than going through the motions of an investigation. Rather, the employer must demonstrate that its response was adequate to protect the complainant.

The Court’s Analysis

The Fifth Circuit reversed the district court’s grant of summary judgment on the hostile work environment claims, finding that genuine disputes of material fact existed regarding both the severity of the harassment and the adequacy of the employer’s response. In so finding, the court made the following key points:

Frequency of the harassment supported a finding of pervasiveness. The employee testified that the discriminatory comments occurred on almost every shift. The court noted that this frequency, combined with the cumulative effect of the conduct, would be sufficient for a reasonable jury to find that the harassment was pervasive enough to alter the conditions of employment.

The comments were potentially humiliating, not merely offensive. Mocking a person’s food, accent, and racial characteristics in a professional workplace could be humiliating.

Second-hand harassment was relevant. The court also relied on testimony from another Black nurse who experienced similar harassment from the same group of coworkers. This second-hand evidence contributed to the hostile work environment analysis because it demonstrated a broader pattern of discriminatory behavior in the unit.

The employer’s investigation raised genuine disputes about adequacy. The court identified multiple red flags in the hospital’s investigation: discrepancies in testimony about who was interviewed, missing investigation files and notes despite testimony that such a file existed, failure to interview at least one Black employee who could corroborate the complaints, exclusion of corroborating statements from the investigation summary, departure from usual investigative practices, and a supervisor’s admission that “cliques were not going anywhere.” These gaps, viewed in the light most favorable to the employee, created a triable issue about whether the employer took prompt remedial action reasonably calculated to end the harassment.

Lessons for Employers

This decision offers valuable guidance for employers facing harassment complaints:

• Maintaining complete investigation records. The court highlighted the absence of an investigation file as a significant problem for the hospital. Employers may wish to create and retain written records of every step in a harassment investigation, including witness interview notes, findings, and remedial measures taken. A complete paper trail may be essential for demonstrating that the employer’s response was adequate.
• Interviewing all relevant witnesses, especially those who can corroborate. Employers may want to ensure that investigators speak to all employees who may have relevant information, including those who share the complainant’s protected characteristics and could confirm or deny the alleged conduct. Skipping potential corroborating witnesses can undermine the credibility of an investigation.
• Following established investigation procedures consistently. The court noted departures from the hospital’s usual investigative practices as evidence of an inadequate response. Employers may wish to develop clear, written investigation protocols and apply them uniformly to every complaint.

Ogletree Deakins’ Workplace Violence Prevention Practice Group will continue to monitor developments and will provide updates on the Employment Law, Healthcare, State Developments, and Workplace Violence Prevention blogs as additional information becomes available.

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Quick Hits

• The New Jersey Supreme Court ruled that the 2023 Opposition Amendment, which permitted the state attorney general to more easily effectuate NJFCA lawsuits based on public disclosures, applied retroactively to pending cases.
• The court held that the Opposition Amendment was a procedural change that applied retroactively because it altered only how the state attorney general could overcome the NJFCA’s “public disclosure bar” (a doctrine that precludes actions by private persons based on publicly disclosed “allegations or transactions”) without affecting the defendants’ conduct.
• The decision revived a qui tam relator’s lawsuit regarding interest rates set by financial firms, highlighting an expanded capability for relators to bring claims even with secondhand information.

In a precedential ruling, the New Jersey Supreme Court held that the Opposition Amendment applied retroactively to a pending NJFCA case because it “did not alter any vested rights of the parties or the substance or scope of the NJFCA.” The amendment altered only the procedure by which the state’s attorney general could oppose dismissal of qui tam relator lawsuits that would otherwise have been blocked by the public disclosure bar, the court found.  

The ruling revived a qui tam relator’s lawsuit originally filed eight years before the 2023 NJFCA Opposition Amendment, challenging the setting of interest rates on government bonds by private financial institutions contracted as remarketing agents.

The Public Disclosure Bar and the 2023 Opposition Amendment

Until 2023, the NJFCA had barred relators who were not the original source of the information underlying their claims from bringing suits based on publicly disclosed allegations or transactions—a doctrine known as the “public disclosure bar.” The bar operated as an affirmative defense that defendants could raise to block NJFCA suits.

However, in 2023, the New Jersey Legislature amended the NJFCA to permit New Jersey’s attorney general to file a notice of opposition to the application of the public disclosure bar without needing to intervene in and take over a relator-initiated lawsuit. The legislature specified that the amendment was to “take effect immediately.”

The Opposition Amendment Is Procedural

The New Jersey Supreme Court distinguished between substantive and procedural statutes, finding that courts have “consistently held” that procedural statutes apply to all proceedings, including both pending proceedings and proceedings related to claims not yet filed. Citing the Supreme Court of the United States’ 1994 holding in Landgraf v. USI Film Products, the New Jersey high court stated that “remedial and procedural statutes can have retroactive effect” because they do not retroactively change a party’s substantive rights. They “do not impair rights a party possessed when [the party] acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.”

The 2023 Opposition Amendment was procedural, the court held, because it merely changed the mechanism by which the attorney general could prevent application of the public disclosure bar, requiring only the filing of a simple notice of opposition instead of full intervention. The court noted that the amendment “had no impact on defendants’ alleged underlying conduct and affected only a procedural aspect of the NJFCA,” “did not alter liability for past conduct”; did not “change any defined terms of the statute or requirements for filing a complaint,” and “did not alter any vested rights of the parties or the substance or scope of the NJFCA.”

The Amendment Applies to Pending Cases

The defendants pointed out that, as part of the 2023 amendments to the NJFCA, the legislature amended the definition of an “original source” of information capable of serving as the basis for an underlying NJFCA suit. They argued that since the New Jersey Appellate Division had previously held that the new definition of “original source” did not apply retroactively, courts must apply the pre-amended version of NJFCA to all suits filed prior to the Opposition Amendment’s effective date. Either way, they argued, the Opposition Amendment was actually substantive.

Rejecting this argument, the New Jersey high court stated that “in assessing multiple amendments to a statute, courts must examine each provision separately and should not assume that different provisions were intended to have the same applicability to pending cases.” The “original source” amendment was substantive, the court held, because it lowered the evidentiary standard for NJFCA suits, allowing more suits by relators with secondhand information.

The same could not be said for the Opposition Amendment, the court wrote, which “did not change any defined terms, substantive elements, or attach any new rights or legal consequences to pre-amendment conduct.” The attorney general “always had the ability” to oppose the public disclosure bar, meaning that the parties could not reasonably have expected at the time of the alleged conduct or during the litigation that public disclosure would completely bar NJFCA claims.

Key Takeaways

The New Jersey Supreme Court’s ruling potentially increases businesses’ exposure to qui tam lawsuits. The decision indicates that the public disclosure bar is a less reliable defense against NJFCA liability, as the attorney general now needs only to file a notice of opposition rather than intervene in a false claims suit. This reduces the burden on the State of New Jersey for keeping qui tam actions alive.

Moreover, the case sets a precedent in New Jersey that amendments to state law amending the procedural rights of parties may be applied retroactively to litigation pending at the time of the amendments’ effective dates. That means businesses involved in long-running litigation may need to be aware of mid-case legislative changes that could alter the landscape of their pending cases.

Ogletree Deakins’ Morristown office will continue to monitor developments and will provide updates on the Ethics/Whistleblower, Government Contracting and Compliance, and New Jersey blogs as additional information becomes available.

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