Quick Hits

• The DOL’s new website for the Center for Faith includes resources on preventing workplace religious discrimination and how faith organizations can access federal grants.
• The website is part of the Trump administration’s focus on addressing religious bias in the workplace.
• Federal antidiscrimination laws protect all types of religious belief, as well as atheism.

The DOL established the Center for Faith in response to an executive order in 2025. The Center for Faith engages with faith-based organizations to defend religious liberties, combat religious bias, and maximize their participation in grant funding opportunities.

The new website compiles resources from the White House, the DOL, and the U.S. Equal Employment Opportunity Commission (EEOC) to explain employers’ legal obligations to provide a workplace free of religious discrimination, harassment, and retaliation.

It includes an interactive state map showing religious protections in different states. It also includes retirement plan resources for faith-based organizations and links to executive orders and federal guidance regarding religious discrimination.

Next Steps

Private employers may wish to review and update their written policies and practices to ensure that religious discrimination, harassment, and retaliation will not be tolerated. They may wish to train supervisors to understand state and federal antidiscrimination laws and when employers should consider providing religious accommodations.   

In addition, employers may wish to ensure that individuals responsible for investigating workplace concerns are trained to address any internal complaints concerning alleged unfavorable treatment on the basis of religion in a prompt and effective manner consistent with other categories of workplace concerns.

Ogletree Deakins’ Diversity, Equity and Inclusion Compliance Practice Group will continue to monitor developments and will post 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.

Simone R.D. Francis is a shareholder in Ogletree Deakins’ St. Thomas and New York offices.

Charles L. Thompson, IV, is a shareholder in Ogletree Deakins’ San Francisco 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

• West Virginia legislators passed a bill (HB 4009) that permits companies to provide portable benefit accounts for workers without needing to classify those workers as employees.
• Governor Patrick Morrisey has not signed or vetoed the bill yet.
• If enacted, the bill would take effect for taxable years starting on January 1, 2026, or later.

Portable benefits are benefits that stay with the individual and accumulate based on hours worked or a percentage of transaction fees. They can function similar to a 401(k), paid time off program, or health savings account (HSA). Instead of benefits offered by one employer, portable benefits allow workers to receive funding from multiple companies in a single account. Often, a third-party administrator handles the contributions from the various employers.

Unlike employees, independent contractors are not legally entitled to minimum wage, overtime pay, unemployment benefits, and workers’ compensation. Some states require certain employers to provide paid sick leave and/or disability insurance to employees, but not independent contractors.

The West Virginia bill would provide an income tax deduction for contributions to and funds received in portable benefits accounts.

Utah and Alabama recently enacted similar laws on portable benefits for independent contractors.

Next Steps

The West Virginia bill will take effect in June 2026 if Governor Patrick Morrisey does not veto it. It would be effective for taxable years starting on January 1, 2026, and thereafter. It is unclear how many employers would start providing portable benefits that were not doing so already, but this bill could foster interest in doing so.

Employers in West Virginia may wish to track the number of independent contractors they use and carefully document the legitimate reasons for classifying each worker as an independent contractor, rather than an employee. Employers that misclassify workers as independent contractors may face federal or state fines and liability for unpaid wages, overtime pay, unpaid taxes, or workers’ compensation. It is unclear how this law will impact classification arguments under federal law. 

Ogletree Deakins will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation, Wage and Hour, and West Virginia blogs as additional information becomes available.

Information on state and federal independent contractor laws is also available on the Ogletree Deakins Client Portal. If this proposed rule is adopted, the Client Portal will provide updates in the Federal Independent Contractors law summary. Snapshots and updates are available for all registered client users. Detailed information is available for Premium and Advanced subscribers. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

Bethany S. Wagner is a shareholder in Ogletree Deakins’ Pittsburgh office.

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

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Quick Hits

• Oregon’s Senate Bill (SB) 916 extends unemployment insurance benefits to both public and private sector workers participating in strikes.
• The U.S. Department of Labor has raised concerns about the SB 916, warning that striking workers must still demonstrate they are actively seeking work to receive benefits.
• Employers may want to review collective bargaining agreements and prepare for longer and more frequent work stoppages, as the law shifts the balance of power in labor disputes while raising questions about its long-term impact on Oregon’s business climate.

What the Law Does

SB 916 allows striking workers to be eligible for up to ten weeks of unemployment benefits during a strike. Striking employees must wait two weeks before receiving UI benefits—i.e., they must wait one week before becoming eligible for benefits (referred to as an “unpaid strike week” on the Oregon Employment Department website, in addition to the existing one-week waiting period required for all claimants before UI benefits can be paid.

The law requires UI benefits to be paid back if the employee later receives backpay that results in an overpayment of benefits. School districts will also be required to deduct from the employee’s future wages the benefits charged for weeks during a strike.

UI benefits do not fully replace a worker’s wages, and range from roughly $200 to $870 per week as of March 2026, depending on prior earnings.

Oregon is the first state to offer unemployment benefits to both public and private-sector employees who go on strike. There are three states—New Jersey, New York, and Washington—that grant some unemployment benefits to striking workers, but in those states, public employees are barred from striking. SB 916 does not modify existing Oregon law prohibiting certain types of public employees, like police officers and firefighters, from participating in a strike while allowing other public employees to strike in certain circumstances. The new law’s focus, instead, is on whether an employee is out of work “due to a labor dispute,” and it makes UI benefits available in that circumstance.

Federal Pushback in 2026

The law went into effect on January 1, 2026, and it didn’t take long for the federal government to weigh in with compliance concerns.

On January 8, 2026, the U.S. Department of Labor (DOL) issued guidance for state administrators and UI directors. The DOL’s guidance noted that federal law requires UI claimants to be “able to work, available to work, and actively seeking work” in Section 303(a)(12) of the Social Security Act. The DOL specified that a worker on strike must engage in activities that demonstrate to the state UI agency that they meet this requirement and that their efforts to secure other work are “genuine in nature.” The DOL cautioned that states cannot exempt workers on strike from this requirement and that doing so could result in the loss of federal grants. Further, if an employer asks an employee to return to work before a labor dispute is resolved and the employee refuses, the DOL advised this could be considered a refusal of work that would need to be adjudicated by the state.

The Oregon Employment Department (OED) currently advises striking workers that they must be engaged in work-seeking activities, like attending job placement meetings sponsored by the OED or updating a resume. As of March 2026, the OED website notes that “requirements for actively seeking work may change” and references “ongoing discussions” with the DOL.

First Major Test: Portland Community College Strike (March 2026)

Oregon’s SB 916 is now facing its first significant real-world test at Portland Community College (PCC), where two unions representing approximately 2,300 employees, including faculty, academic professionals, and classified staff, went on strike on March 11, 2026. The strikes mark the first in PCC’s history and are being watched closely as a test case for how SB 916 will work in practice.

The Bigger Picture

SB 916 shifts the balance of power between employers, unions, and workers in collective bargaining and labor disputes, though the extent of that shift remains to be seen. Employees are not insulated from the economic reality of a mandatory two-week waiting period before UI benefits begin, and when benefits do arrive, they replace only a fraction of the employee’s regular pay. Data from the U.S. Bureau of Labor Statistics suggests that the majority of strikes are shorter than the waiting period for UI benefits, meaning that most striking workers might exhaust the waiting period before collecting UI benefits.

For employers, the more pressing concern may be less about individual strikes and more about the aggregate effect: SB 916 is expected to produce longer and more frequent work stoppages over time, and work stoppages impose a direct cost on Oregon’s unemployment insurance fund (a fund sustained by employer payroll taxes), raising legitimate questions about the law’s long-term effect on Oregon’s business climate.

Next Steps for Employers

Unionized employers may want to review their collective bargaining agreements with fresh eyes to determine if and how a no-strike clause applies.

Unionized employers may also want to prepare for the increased possibility of a strike. In addition to modeling the financial exposure of a prolonged work stoppage, there are many things to consider when preparing for a strike, including the following top-line items:

• Developing a plan to continue operations, including hiring replacement workers or cross-training employees and management.
• Communicating with customers and third-party vendors about operations.
• Determining the legality of preparations for a strike, how to communicate with employees, and preparing for other important aspects of handling a strike or potential strike.

Public employers may also want to determine whether and how UI benefits may be recovered.

Ogletree Deakins’ Portland (OR) office will continue to monitor developments and will post updates on the Higher Education, Oregon, and Traditional Labor Relations blogs as additional information becomes available.

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Quick Hits

• Artificial intelligence, facial recognition systems, and body cameras on security guards are some of the newer methods retailers are using to prevent crime in stores.
• Recording audio without consent may be prohibited under federal and state laws.
• Employees and customers have certain privacy rights where there is a reasonable expectation of privacy.

Retailers are under pressure to balance security concerns, such as preventing theft, with the privacy rights of customers and employees. Some retailers have begun using facial recognition technology, surveillance cameras with artificial intelligence capabilities, and/or security guards with body cameras. These technologies may implicate privacy laws, depending on the state and how they are used.

The Federal Wiretap Act prohibits the intentional interception or procurement of any wire, oral, or electronic communication without at least one party’s consent. It applies to audio recordings, but not video-only recordings.

California, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, New Hampshire, Pennsylvania, and Washington State require consent by all parties to legally record audio of a conversation. Other states allow one-party consent, meaning one party in a conversation can record audio without the other party’s consent.

In general, video recordings without audio are permitted in retail environments, except in places where there is an expectation of privacy, such as bathrooms and dressing rooms. Certain states expressly prohibit hidden cameras in places where there is an expectation of privacy. Video recordings, however, are permitted in public places like store aisles, parking lots, entranceways, and checkout counters.

In particular, facial recognition systems may increase liability for employers because some states, including California, Illinois, Texas, and Washington, restrict the collection of sensitive biometric data without notice and consent. Likewise, in 2024, the Federal Trade Commission (FTC) settled a case against a pharmacy retailer with the court ordering the pharmacy retailer to cease using facial recognition technology for security or surveillance purposes for five years.

Depending on the state, retail stores may be required to inform customers and employees if audio and video are recorded, or if facial recognition tools are used. This can be accomplished with posted signs, onboarding paperwork, and employee handbooks.

Furthermore, the Federal Trade Commission Act prohibits ‘‘unfair or deceptive acts or practices in or affecting commerce.’’ This includes practices that are likely to cause substantial injury to consumers and cannot be reasonably avoided by consumers.

Next Steps

Employers may wish to review their written policies and practices to ensure they comply with state laws on video and audio surveillance. Privacy laws vary greatly by state, making the situation complicated for multistate and multinational retailers. Posting conspicuous disclaimers about video and audio recording may help reduce liability for employers, even when it is not legally required.

Ogletree Deakins’ Retail Industry Group will continue to monitor developments and will post updates on the Cybersecurity and Privacy, Multistate Compliance, and Retail blogs as additional information becomes available.

Brandon R. Sher is a shareholder in Ogletree Deakins’ Philadelphia office and co-chair of Ogletree Deakins’ Retail Industry Group.

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

• USCIS will continue to accept adjustment of status filings based on the Dates for Filing chart in April 2026.
• EB-1, EB-2, and EB-3 categories are current on the Dates for Filing chart for all countries other than India, China, and Philippines (only EB-1 and EB-2 categories are current for Philippines).
• EB-1 category final action dates advance for China and India.
• EB-2 and EB-3 categories for India advance significantly on dates for filing.
• EB-2 India and EB-3 China final action dates advance.

The Final Action Dates chart shows the following movement in the April 2026 Visa Bulletin:

• EB-1: All countries remain current except China and India (which both advance to April 1, 2023).
• EB-2: All countries are current except China (which has no movement) and India (which advances to July 15, 2014).
• EB-3: All countries advance except India and Philippines.
• EB-4: All countries advance to July 15, 2022.
• Certain Religious Workers: All countries advance to July 15, 2022.
• EB-5: China advances to September 1, 2016.

Source: U.S. Department of State, April 2026 Visa Bulletin, Dates for Filing Chart

The Dates for Filing chart shows the following movement in the April 2026 Visa Bulletin:

• EB-1: No movement for China and India. All other countries remain current.
• EB-2: India advances to January 15, 2015. No movement for China. All other countries remain current.
• EB-3: India advances to January 15, 2015. No movement for China and Philippines. All other countries are current.
• EB-4: No movement.
• Certain Religious Workers: No movement.
• EB-5: No movement.

Source: U.S. Department of State, April 2026 Visa Bulletin, Dates for Filing Chart

Key Takeaways

The State Department notes that this advancement is in part due to the immigrant visa processing pause on certain nationalities and cautions that additional demand and future policy shifts could necessitate retrogression later in the fiscal year to maintain immigrant visa issuance within annual limits.

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

• The Third Circuit allowed a white police officer’s discrimination lawsuit to proceed, predicting that the Supreme Court of New Jersey would drop the “Background Circumstances Rule” requiring heightened proof for reverse discrimination claims.
• The ruling reflects a 2025 decision by the Supreme Court of the United States that rejected higher standards for majority-group plaintiffs in discrimination cases.
• A concurrence further criticized the “Background Circumstances Rule” as discriminatory and unconstitutional.

In Massey v. Borough of Bergenfield, the Third Circuit reversed a district court’s summary judgment ruling in favor of a New Jersey municipality in a racial and religious discrimination case brought by a “white male” police officer. The police officer, who had served as deputy chief and acting officer in charge of the borough police department, alleged he was unlawfully discriminated against when seeking a promotion to police chief after the municipality hired a candidate who is an “Arab-Muslim” male and who held the lower rank of captain.

The Third Circuit found that the police officer had sufficiently raised issues that entitled him to a trial on his claims brought under New Jersey’s Law Against Discrimination (NJLAD) and the Equal Protection Clause, 42 U.S.C. § 1983, but affirmed the dismissal of claims under 42 U.S.C. § 1981.

The Background Circumstances Rule

At the center of the case was the application of New Jersey’s “Background Circumstances Rule,” which places a heightened burden on a plaintiff from a majority group to “show that he has been victimized by an unusual employer who discriminates against the majority.” Such tests have made it more difficult for plaintiffs from a majority group (e.g., white, male, or Christian) to bring employment discrimination claims, or so-called reverse discrimination claims.

The district court granted summary judgment to the municipality, concluding that the police officer had not met the requirements of the “Background Circumstances Rule” and had failed to adequately rebut the municipality’s justifications for its promotion decision.

Following the district court ruling, the Supreme Court issued its June 2025 decision in Ames v. Ohio Department of Youth Services, rejecting such “background circumstances” rules and holding that plaintiffs from majority groups cannot be held to a higher standard of proof in employment discrimination cases under Title VII of the Civil Rights Act of 1964. In the unanimous opinion, the Supreme Court said that with Title VII, “Congress left no room for courts to impose special requirements on majority-group plaintiffs alone.”

Third Circuit Says New Jersey Will Follow Ames

With no New Jersey supreme court decision addressing New Jersey’s “Background Circumstances Rule” following Ames, the Third Circuit in Massey examined what the state supreme court would likely decide. The Third Circuit predicted that the New Jersey high court would, as the Supreme Court did in Ames, find that the rule “no longer has a permissible role to play in litigation under” NJLAD and scrap it. Further, the Third Circuit found that the rule’s “vagueness leaves it susceptible to arbitrary applications and inconsistent results.”

In reaching that conclusion, the Third Circuit recognized the Supreme Court of New Jersey’s reliance on federal law and that the NJLAD is a “mirror image” of Title VII. Like Title VII, “[t]he facial coverage of the NJLAD leaves no room for the Background Circumstances Rule,” the Third Circuit stated. In finding that the white male policer officer presented enough evidence to defeat the municipality’s summary judgment motion, the Third Circuit ruled that the municipality’s “naked invocation of a diversity preference is not a legitimate, non-discriminatory reason for an employment decision.” The court further observed that a jury could either “credit” defendants’ references to diversity as a “defensible policy aim—even though the comments are not, on their own, a lawful race-neutral justification for a challenged employment action” or regard them as “‘code words’ reflecting discriminatory intent.”

In a separate concurring opinion, Judge Emil Joseph Bove III, who also authored the opinion of the court, raised further arguments against the “Background Circumstances Rule.” Judge Bove argued that the rule is a “discriminatory application” of the NJLAD, and “plainly” violates the Equal Protection Clause, and criticized it for violating the racial neutrality in decision-making required by the antidiscrimination law without any legitimate justification. “Even if there was an interest sufficient to warrant the racial discrimination at issue, the Background Circumstances Rule is not ‘narrowly tailored’—meaning ‘necessary’—to achieve that interest,” Judge Bove stated in the concurrence.

Next Steps

The Massey ruling is the latest to criticize heightened pleading standards for employment discrimination claims brought by plaintiffs from majority groups. While the Supreme Court struck down such standards for Title VII claims, some states continue to impose similar requirements, but the Massey ruling suggests those standards could also be on the chopping block. At the same time, employers in New Jersey should note that the Third Circuit’s ruling is not a definitive statement of New Jersey law, and it is possible that the Supreme Court of New Jersey could keep the Background Circumstances Rule or some version of it.

Meanwhile, the Ames case, combined with the U.S. Equal Employment Opportunity Commission’s (EEOC) new enforcement priorities encouraging “white males” to come forward with employment discrimination claims, means employers are likely to see more claims from members of majority groups under both state and federal law.

Ogletree Deakins’ Morristown office and Diversity, Equity, and Inclusion Compliance Practice Group will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Employment Law, and New Jersey blogs as additional information becomes available.

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Quick Hits

• On March 17, 2026, Washington Governor Ferguson signed legislation that amends the definition of “employers” that are required to comply with the state’s mini-WARN law to exclude Native American tribes.
• The bill also changes the notices that must contain the names and addresses of employees affected by layoffs.
• The amended mini-WARN Act also stops disclosure under the Public Records Act of the names and addresses of affected employees.

ESB 6106 amends the Securing Timely Notification and Benefits for Laid-off Employees Act (STABLE Act) in two key respects.

First, the bill excludes from the definition of “employer,” “any Indian tribe,” as defined in section 3306(u) of the federal unemployment tax act. This change was designed to align with other laws honoring the governmental status of Native American tribes in the state.

Second, ESB 6106 reduces the dissemination of the names and addresses of employees affected by layoffs and business closures by:

• eliminating the names of the employees affected from the notice to affected employees who are not represented by a union,
• including the names and addresses of affected employees only on the notices to the employees’ bargaining representative and the Employment Security Department (ESD), and
• exempting the names and addresses of affected employees from public disclosure under the Public Records Act (PRA).

The changes to the notice requirements will better protect employee privacy by limiting the public disclosure of employees’ names and addresses.

The amendments take effect immediately, so employers will want to update their notice forms to accommodate those changes.

Ogletree Deakins’ Seattle office will continue to monitor developments and will post updates on the Reductions in Force and Washington blogs as additional information becomes available.

In addition, information on WARN laws is available on the Ogletree Deakins Client Portal. The Terminations and RIFs topic page covers WARN and Mini-WARN, Termination Notices, Final Pay Upon Termination, and other related federal and state laws. Snapshots and updates are available for all registered client users. Premium and Advanced subscribers have access to the detailed law summaries, including Washington WARN and Mini-WARN, applicable notice templates, and a step-by-step guide for handling RIFs and Closures. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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In Thomas v. EOTech, LLC, the court aligned with Sixth Circuit jurisprudence in holding that judicial enforcement of such agreements would “disrupt the relevant statutes’ carefully integrated and uniform remedial schemes.” For employers with provisions in employment agreements shortening the statutes of limitations for such claims, this decision is a warning to review those documents and reassess the risk of litigation.

Quick Hits

• Agreements that prospectively shorten the statutory filing periods for Title VII or ADEA claims are unenforceable.
• According to the Fourth Circuit, such agreements disrupt the balance of competing interests under Title VII and the ADEA, including society’s interest in preventing and redressing discrimination, employers’ interest in avoiding stale claims, and Congressional interest in a uniform and nationwide enforcement system.
• Maryland law may permit contractual shortening of limitations periods; however, such agreements may turn on whether they are reasonable.

Legal Framework

Under both Title VII and ADEA, an employee who believes his or her rights have been violated cannot simply file a lawsuit. Instead, Congress created an “intricate remedial scheme” requiring employees first to file a charge with the U.S. Equal Employment Opportunity Commission (EEOC). Such a charge must be filed within 300 days of the alleged discriminatory act if a state (for claims under ADEA and Title VII) or local (for claims under Title VII only) fair employment practices agency enforces a law prohibiting discrimination on the same basis; if not, the period is 180 days.

The EEOC then conducts an investigation. If the EEOC finds that discrimination has occurred, it will seek to resolve the matter through conciliation. If conciliation fails, the EEOC may bring suit on the employee’s behalf, or it may instead issue a dismissal of the charge and a “Notice of Right to Sue.” If the EEOC determines that it cannot confirm discrimination, or perhaps at the request of the employee (typically if more than 180 days have passed since the filing of the EEOC charge), the agency will dismiss the matter and issue the Notice of Right to Sue. After receipt of the notice, the employee then has 90 days to file suit in federal court.

This means employees always have a total of at least 270 days, and more typically 390 days, under the federal scheme to complete both the EEOC charge filing and the federal court lawsuit filing steps, not counting the time the charge is sitting before the EEOC.

Factual Background

In the current case, an employee signed a pre-employment document containing a “Limitations Agreement” that shortened the time she would have to sue her employer for any disputes “relating to [her] employment” to 180 calendar days. The agreement provided that this 180-day period would be paused while an administrative charge was pending before the EEOC.

The employee filed a charge of discrimination with the EEOC and the Maryland Commission on Civil Rights 106 days after her employment termination. After receiving a right-to-sue letter, she filed suit in federal district court 90 days later, alleging violations of Title VII, the ADEA, and the Maryland Fair Employment Practices Act (MFEPA). The employer argued that the complaint was untimely under the Limitations Agreement because 196 countable days had elapsed. The district court granted summary judgment in favor of the employer on all claims.

The Court’s Analysis

The Fourth Circuit threw out the district court’s summary judgment ruling for the employer on the Title VII and ADEA claims, rejecting the Limitations Agreement as unenforceable. The court’s key rulings included:

• The timing rules strike a “delicate balance” of interests. According to the court, in establishing these limitations periods, Congress weighed various interests, including society’s interest in preventing unlawful discrimination and employers’ interests in avoiding the defense of stale claims.
• Contractual shortening of Title VII and ADEA limitations periods is impermissible. Even with tolling during EEOC proceedings, the Limitations Agreement gave the employee only 180 days to both file a charge and then a lawsuit—at least 90 days less than federal law provides. The agreement “cannot function without reducing” either the time to file a charge or the time to sue, and either outcome “would do violence to the carefully integrated remedial schemes Congress enacted.”
• Shortened charge-filing deadlines undermine system navigability. The remedial scheme contemplates that “laypersons, rather than lawyers,” will initiate the process. Enforcing contracts that shorten these periods would require employees to “remember whether they ever signed a document purporting to limit how long they had to file a charge with the EEOC, locate the relevant document, and figure out for themselves” how it modifies what federal statutes say.
• Shortened suit-filing deadlines disrupt Congress’s remedial design. Although the employer argued that employees could hire lawyers to prepare lawsuits while charges are pending, the court rejected this as inconsistent with Congress’s preference “to avoid private lawsuits if possible.” Requiring employees to prepare lawsuits before the EEOC completes its determination process undermines the focus on “cooperation and voluntary cooperation” in achieving equal employment opportunity.
• Shortened deadlines could distort EEOC decision-making. If the EEOC knows an employee has limited time to file a private suit, it might feel compelled to prioritize that employee’s case over others with stronger merit. The court found “no evidence Congress meant for the EEOC to have to weigh such tradeoffs.”
• Shortened limitations periods may be permissible under Maryland law. Under Maryland law, parties may modify limitations periods if there is no controlling statute to the contrary, the period is reasonable, and no defenses like fraud or duress apply. The employee failed to address the required “totality of the circumstances” test for reasonableness determinations, and the court therefore upheld the dismissal of her MFEPA claim. The court cautioned, however, that it was not addressing whether an employee in a similar situation “could have made a winning argument.”

Key Takeaways for Employers

As this decision carries significant implications for employer policies and practices, the following points may prove pragmatic and instructive, especially in the Fourth and Sixth Circuits:

• Review employment agreements. Any agreement purporting to shorten the time employees have to bring Title VII or ADEA claims is now unenforceable in the Fourth Circuit (and the Sixth Circuit). Employers should consider auditing offer letters, employment agreements, and onboarding documents for such provisions and consult with counsel about whether to revise or remove them.
• Understand the federal-state distinction. While contractual limitations periods are unenforceable for federal claims, they may still be enforceable for state-law claims, depending on the jurisdiction’s law.
• Expect potential circuit expansion. With both the Fourth and Sixth Circuits now aligned on this issue, it is possible that other circuits may follow suit. Multistate employers may wish to consider applying a uniform national approach that does not rely on contractual limitations periods for federal antidiscrimination claims.
• Reassess litigation strategy. Employers defending discrimination claims on the basis of contractual limitations provisions may wish to prepare for the possibility that claims previously thought to be time-barred may proceed.

Ogletree Deakins will continue to monitor developments and will provide updates on the Employment Law, Multistate, and State Developments blogs as additional information becomes available.

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Quick Hits

• The California Court of Appeal, Second Appellate District, affirmed the trial court’s order compelling arbitration of individual employment claims, finding the parties’ arbitration agreement was governed by the FAA.
• The court upheld the dismissal of class claims, as the arbitration agreement expressly prohibited class, collective, or representative proceedings.
• The decision clarifies that parties may voluntarily elect to have the FAA govern their arbitration agreement, regardless of whether the underlying transaction involves interstate commerce.

Background

West Coast Dental Administrative Services (West Coast Dental) manages a network of dental service facilities throughout California, providing administrative and support services to affiliated dental practices. The employee, Sinedou Tuufuli, was hired as a collector and customer service representative in August 2017 and electronically signed an arbitration agreement at the time of hire. The agreement required final and binding arbitration of any employment-related disputes and expressly prohibited the arbitrator from certifying or adjudicating class, collective, or representative claims.

In April 2023, Tuufuli filed a complaint asserting individual and class claims for alleged violations of California labor and business laws. West Coast Dental moved to compel arbitration of the individual claims and to dismiss the class claims, arguing that the arbitration agreement was governed by the FAA. Evidence submitted included the employer’s status as a Delaware corporation, its offices in California and Washington, and its sourcing of materials from outside California.

Tuufuli opposed the motion, contending that the FAA did not apply because her work was performed exclusively in California and did not involve interstate commerce. The trial court granted the employer’s motion, finding the arbitration agreement valid and governed by the FAA, and dismissed the class claims pursuant to the agreement’s express terms.

Key Holdings

FAA Coverage. The appellate court held that the FAA governed the arbitration agreement because the parties “expressly agreed” to its application. The court noted that, under federal and California precedent, parties may voluntarily elect to have the FAA apply to their arbitration agreement, and the presence of interstate commerce is not the sole basis for FAA coverage.

Class Claims Dismissal. The court affirmed the dismissal of class claims, as the arbitration agreement unambiguously prohibited class, collective, or representative proceedings. The court reiterated that the FAA preempts state laws requiring a judicial forum for claims that the parties agreed to arbitrate individually.

Interstate Commerce Not Required. The decision clarifies that, while the FAA applies to contracts involving interstate commerce, parties may also contractually agree to FAA governance even if the underlying transaction does not involve substantial interstate activity.

Key Takeaways

• Arbitration agreements may be governed by the FAA if the parties expressly agree, regardless of whether the employment relationship involves interstate commerce.
• Express prohibitions on class, collective, or representative claims in arbitration agreements are enforceable under the FAA, and courts will dismiss such claims accordingly.
• Employers may want to ensure that arbitration agreements clearly state the governing law and the scope of arbitrable claims, including any limitations on class or representative proceedings.

The appellate court’s decision underscores the importance of precise drafting in arbitration agreements and the enforceability of contractual provisions under the FAA. Employers in California and beyond may want to review their arbitration policies and agreements to ensure compliance with federal and state law and to maximize enforceability of individual arbitration provisions.

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

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Quick Hits

• High-Income Threshold: Employees earning NZD 200,000 or more in total remuneration will lose unjustified dismissal protections.
• Remedies Reduced or Eliminated for Certain Conduct: Available remedies in personal grievance claims are limited where an employee’s conduct contributed to the situation, and authorities can reduce or eliminate compensation entirely where the employee engaged in serious misconduct, even if the employer’s process was flawed.
• Procedural Fairness Standard Loosened: A dismissal will not be found unjustified solely due to procedural defects unless the error materially disadvantaged the employee, effectively shifting the analysis toward a “harmful error” standard.
• Worker Classification Gateway Test: A new statutory gateway test determines whether a worker must be treated as a contractor, making it more difficult for gig economy workers to challenge their employment status.

Reform #1: High-Income Threshold Removes Unjustified Dismissal Protections

Effective February 21, 2026, employees earning NZD 200,000 or more in total annual remuneration are barred from bringing personal grievance claims for unjustified dismissal. The restriction applies immediately to new employees hired after February 21, 2026, who meet the threshold. For existing employees, the law provides a twelve-month transitional period. Employers and employees may agree to opt out of the restriction.

To determine whether this restriction applies, employers must correctly calculate total annual remuneration and consider related timing implications, particularly when planning workforce reductions. Total remuneration includes base salary, bonuses, commissions, and equity compensation, calculated based on the employee’s earnings during the 364 days preceding the termination date. Because this calculation uses a rolling 364-day period, whether certain bonus or commission payments are counted depends on the termination date. As a result, an employee who does not meet the threshold under one calculation window may meet it under a slightly different calculation window if a significant enough variable payment falls within the relevant 364-day period. For redundancy actions, forecasting how many employees will meet or exceed the threshold may become an important aspect of planning. Employers may also want to consider that these high earners can still file breach of contract and discrimination claims, making careful crafting of employment agreements important.

Reform #2: Remedy Reductions for Serious Misconduct and Contributory Conduct

The reforms introduce significant changes to remedies in personal grievance claims. An employee whose behavior constitutes serious misconduct and contributed to the situation that gave rise to the personal grievance may lose all available remedies, including reinstatement. If the conduct does not rise to the level of serious misconduct, but the employee nevertheless contributed to the circumstances, the only available remedy will be lost wages, and even that can be reduced, potentially by up to 100 percent, depending on the employee’s level of contribution. While the Employment Relations Authority already had the ability to reduce remedies where an employee contributed to the circumstances giving rise to their grievance, the law now explicitly permits reductions of up to 100 percent.

Critically, the legislation does not define “serious misconduct,” and litigation is expected over what conduct qualifies or whether the existing common law definition applies. Courts will also need to interpret what it means for an employee to “contribute” to a grievance and how to quantify proportionate reductions. While this reform shifts the balance toward employers, employers should not assume they can dispense with fair process simply because misconduct occurred; courts will still expect reasonable conduct throughout.

Reform #3: Procedural Fairness Shifts Closer to a ‘Harmful Error’ Test

The reforms replace the traditional rigid checklist approach to procedural fairness with an assessment of fairness “in all the circumstances.” Previously, an employer’s procedural mistake could significantly jeopardize whether a dismissal would be deemed “fair”—even if the underlying reason for dismissal was sound.

Under the 2026 amendments, procedural defects alone will not render a dismissal unjustified unless the error resulted in unfair treatment of the employee. This is functionally similar to a “harmful error” or “materiality test,” as procedural errors that do not affect the fairness of the outcome should not invalidate an otherwise justified dismissal.

Reform #4: Contractor Classification Now Subject to a Five-Factor Gateway Test

The reforms introduce a five-factor checklist to determine whether a worker is a contractor rather than an employee. Previously, when disputes arose about a worker’s status, courts determined the “real nature of the relationship” by examining multiple factors about how the work was actually performed, an approach that often led to uncertainty and frequent litigation.

Under the new “gateway” test, if all the following conditions are met, the worker is automatically considered a contractor and cannot challenge his or her status:

• there is a written contract specifying the worker is an independent contractor;
• the worker is free to work for other clients, except while performing work for the business;
• the worker is either:
  • not required to be available at certain times or for a minimum period, or
  • able to sub-contract the work;
• the business cannot terminate the contract if the worker refuses additional tasks; and
• the worker had a reasonable opportunity to seek independent advice before entering the arrangement.

If any of the above requirements are not met, authorities will apply the traditional multifactor analysis to examine the real nature of the relationship.

Next Steps

The 2026 reforms represent a bold attempt to modernize New Zealand’s employment law framework. Litigation will play a pivotal role in clarifying definitions, testing boundaries, and shaping workplace rights. Employers may want to consider these reforms when planning terminations and structuring independent contractor relationships.

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

For additional insights, Goli Rahimi and Patty Shapiro discuss key changes under New Zealand’s Employment Relations Bill in Ogletree Deakins’ podcast, “Cross-Border Catch-Up: Key Employment Law Reforms in New Zealand.”

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