Workforce Bulletin

What employers should know about key developments this week:

• False Claims Act Exposure: The Department of Justice's (DOJ's) Civil Rights Fraud Initiative is scrutinizing any entity that contracts with or receives funding from the federal government whose diversity, equity, and inclusion (DEI) practices may violate the False Claims Act.
• April 25 Deadline for Federal Contractors: A new executive order requires federal contractors and their subcontractors to certify that they will not engage in discriminatory DEI programs. Federal contractors must act now to meet the looming compliance deadline.
• Multifront Enforcement Risk for All Employers: Private employers should also take note—investigations, subpoenas, and contract obligations are hitting from multiple directions, often before litigation even begins, as the DOJ and the Equal Employment Opportunity Commission signal aggressive enforcement of anti-discrimination laws.

In this episode of Employment Law This Week^®, Epstein Becker Green attorneys Leah Brownlee Taylor and Lauri F. Rasnick unpack the administration's escalating DEI enforcement actions.

What employers should know about key developments this week:

• DOL Proposes Opening 401(k) Investments: The U.S. Department of Labor (DOL) proposed a rule establishing a process-based safe harbor for fiduciaries under the Employee Retirement Income Security Act, opening the door to alternative assets—including cryptocurrency, private equity, and real estate—in 401(k) plans.
• NLRB Wants Its Removal Protections Stripped: The National Labor Relations Board (“NLRB” or “Board”) asked a federal court to declare unconstitutional the statutory provisions limiting the U.S. president's ability to remove members of the NLRB and administrative law judges—marking the first time the Board itself has taken this position.
• Compliance with Military Leave Requests: Amid ongoing global conflicts, employers should prepare for an influx of military leave requests and review their obligations under the federal Uniformed Services Employment and Reemployment Rights Act, as well as any applicable state law.

What employers should know about key developments this week:

• Artificial Intelligence (AI) Conversations Are Not Privileged: In United States v. Heppner, a federal judge found that conversations with an AI tool are not privileged due to the tool's terms of service and privacy policy—a stark reminder that employers should not discuss active cases or employment matters with public AI tools.
• IT Company Fined for AI-Generated Job Postings: The U.S. Department of Justice imposed a nearly $10,000 fine on an IT company for posting AI-generated job advertisements that unlawfully excluded U.S. citizens—highlighting the need for employers to keep a human in the loop when using AI in hiring.
• Washington Bars Mandatory Employee Microchipping: Starting in mid-June 2026, Washington State will prohibit mandatory employee microchip implants, joining more than a dozen states that have banned the practice.
• Colorado Works to Repeal 2024 AI Law: A working group has proposed repealing and replacing Colorado's comprehensive AI law before its June 30, 2026, effective date, which would remove onerous compliance and reporting obligations on employers, including small businesses.

What employers should know about key developments this week:

• Sixth Circuit Rejects Cemex Bargaining Order: The U.S. Court of Appeals for the Sixth Circuit refused to enforce a bargaining order issued under the National Labor Relations Board’s (NLRB’s) 2023 Cemex standard.
• Cemex Remains in Effect Outside the Sixth Circuit: The NLRB continues to treat Cemex as binding policy in all other jurisdictions, leaving employers outside the Sixth Circuit’s reach exposed to bargaining orders under the standard.
• A Formal Reversal May Be Coming: With its current composition, the NLRB is widely expected to reject Cemex outright when the appropriate case arises—thereby restoring the long-standing framework requiring unions to win a representation election before gaining recognition.

In this episode of Employment Law This Week^®, Epstein Becker Green attorney Steven M. Swirsky provides insights on the Sixth Circuit's decision and what it means for employers navigating union recognition demands.

What employers should know about key developments this week:

• FTC Enforcement Shift on Non-Competes: The Federal Trade Commission (FTC) announced it will enforce non-compete agreements on a case-by-case basis, moving away from broad rulemaking.
• Key Enforcement Priorities: The FTC is prioritizing non-competes in industries with limited access to confidential information and for low-wage, hourly, or entry-level workers.
• Health Care Industry Scrutiny: The composition of panelists at the FTC’s recent workshop—including physicians and veterinarians—suggests the agency will continue focusing on non-competes involving health care professionals.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Daniel R. Levy and Gianna Dano break down what the FTC’s new approach means for employers, including key enforcement priorities and compliance tips.

A Case Study of Missouri v. Starbucks Corp. and the Compliance Challenges Ahead

The Missouri Attorney General’s Office recently learned this lesson in Missouri v. Starbucks Corp., when its Title VII anti-DEI case against Starbucks was dismissed by a federal district court judge.

What employers should know about key developments this week:

• National Labor Relations Board (NLRB) Sets New Enforcement Priorities: NLRB General Counsel Crystal Carey directed regional offices to prioritize the resolution of current cases over initiating new enforcement actions.
• Department of Labor (DOL) Targets Non-Union Workplaces: In an internal memo, DOL Solicitor of Labor Jonathan Berry emphasized that enforcement would focus on non-unionized environments, noting that unions were better equipped to address issues in unionized workplaces.
• Equal Employment Opportunity Commission (EEOC) Cracks Down on Diversity, Equity, and Inclusion (DEI) Policies: EEOC Chair Andrea Lucas issued a warning that preference-based diversity policies may violate Title VII of the Civil Rights Act of 1964 and signaled a return to systemic investigations and large-scale litigation.

On March 6, 2026, the U.S. Court of Appeals for the Third Circuit issued a significant decision clarifying how discrimination claims brought by majority-group plaintiffs should be analyzed under the New Jersey Law Against Discrimination (NJLAD). In Massey v. Borough of Bergenfield, the court concluded that majority-group plaintiffs should not be required to satisfy the “background circumstances” rule—a doctrine that imposed a heightened burden on plaintiffs alleging discrimination against majority groups. In reaching that conclusion, the court, predicting that the New Jersey Supreme Court would do the same, relied on the U.S. Supreme Court’s decision in Ames v. Ohio Department of Youth Services, which rejected the background circumstances rule in Title VII of the Civil Rights Act of 1964 (Title VII) cases. Massey marks the first federal appellate decision to apply Ames to state law.

On March 6, 2026, the Division of Corporation Finance at the Securities and Exchange Commission (SEC) issued new and updated Compliance and Disclosure Interpretations (CDIs) for private and foreign companies issuing equity compensation in reliance on Rule 701 to their employees, officers, directors, and certain consultants and advisers.

What employers should know about key developments this week:

• NLRB Reinstates 2020 Joint Employer Rule: Under the National Labor Relations Board’s (NLRB’s) rule, a company is a joint employer only if it exercises substantial, direct, and immediate control over at least one of an employee’s key employment terms.

• Employer Liability Outlook: The risk of joint-employer liability is lower without direct involvement in core employment decisions.
• DOL Proposes New Independent Contractor Rule: The U.S. Department of Labor’s (DOL’s) new proposal revives the 2021 standard, emphasizing economic realities and the actual practices of the parties rather than just the contractual agreements.

In this episode of Employment Law This Week^®, Epstein Becker Green attorneys Erin E. Schaefer and Jeffrey H. Ruzal provide insights on the NLRB and DOL regulations, examining what these developments mean for employers.