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No Slowing Down: Employers’ Recap of the Trump Administration’s First 50 Days

March 24 - Posted at 1:19 PM Tagged: , , , , , , , , , , , , ,

Courtesy of Fisher Phillips

While new presidents are typically judged based on their actions in their first 100 days, the current Trump administration has moved at such a rapid speed that we think another recap is needed at the halfway point. Here’s your employer cheat sheet on Trump’s first 50 days.

Immigration

  • Trump signed 10 immigration orders on day one (Jan. 20). These executive orders, among other things, declared a national emergency at the U.S.-Mexico border, reinstated the “remain in Mexico” policy, terminated the asylum related mobile app, and designated Mexican criminal cartels as terrorist organizations. Read more here. Trump also tried to end automatic birthright citizenship for children of undocumented immigrants, but this order has been blocked nationwide by federal judges in Washington and Maryland while legal challenges play out in court.
  • DOJ announced an aggressive immigration stance (Feb. 5). According to a memo from Attorney General Pam Bondi, the Department of Justice will use “all available criminal statutes to combat the flood of illegal immigration . . . and to support the DHS’s immigration and removal initiatives.” Read more here.
  • DHS shortened the duration of Haiti’s TPS (Feb. 20). Department of Homeland Security (DHS) Secretary Kristi Noem scaled back a previous decision made by Biden-era DHS officials that had extended Temporary Protected Status (TPS) for Haitian nationals who are in the United States. As a result, the TPS designation period for Haitian nationals will end on August 3 (rather than February 3, 2026).
  • DHS unveiled plans for expanded alien registration (March 7). A new DHS rule, which is set to take effect on April 11, significantly expands foreign national registration enforcement by requiring certain noncitizens to register with the government, provide biometric data, and carry proof of registration. This new enforcement push is expected to impact 3.2 million foreign nationals. Read more here.
  • Anything else? The Trump administration has been carrying out its plans for mass deportations and widescale enforcement activities, including workplace raids. Read more here. Changes to nation’s immigration policy have a particularly big impact on the high-tech sector, which has long been reliant on foreign professional skilled workers.

DEI and Equal Opportunity Compliance

  • Trump issued a far-reaching order against “gender ideology” (Jan. 20). The executive order requires the federal government to recognize only two biological sexes (male and female, as determined at conception) and removes the concept of “gender identity” from federal anti-discrimination laws – a stance that seemingly runs counter to the Supreme Court’s Bostock ruling on Title VII’s definition of “sex.” The order also calls for reversals of any policies that allowed gender-identity-based access to single-sex spaces (like bathrooms), and rescinds many Biden-era actions, including 2024 EEOC workplace harassment guidance that expanded protections for pregnant and LGBTQ+ workers. Read more about Trump’s gender ideology order here.
  • Trump issued a sweeping anti-DEI order (Jan. 21). The same order that dismantled key affirmative action standards for federal contractors also barred OFCCP from allowing or encouraging DEI programs and directed federal agencies to combat “illegal” corporate DEI programs in the private sector. Read more about the order here (federal contractors) and here (private sector) – and read below for its current (court-halted) status.
  • Trump fired two Democrat members of the EEOC (Jan. 27). The unprecedented move enabled Trump to quickly install a majority of Republican commissioners rather than having to wait until their normal terms expire over the next two years.
  • Group of plaintiffs sued Trump and his administration (Feb. 3). Chief diversity officers, professors, a restaurant group, and the city of Baltimore filed a complaint in a Maryland federal court, claiming that Trump’s Jan. 21 anti-DEI order is unconstitutional.
  • States started to push back (Feb. 13). Sixteen Democratic state attorneys general issued joint guidance reaffirming their position that workplace DEI remains legal and important to the modern workplace.
  • Federal judge temporarily blocked Trump’s order (Feb. 21). The district court agreed with the plaintiffs who filed the Feb. 3 complaint that certain parts of the order are unconstitutional, and that they were ultimately likely to succeed on the merits of their claims. The court halted enforcement of the order while the lawsuit plays out in court.

Affirmative Action and Federal Contract Compliance

  • Trump dismantled key affirmative action standards (Jan. 21). Trump revoked a 1965 executive order that required federal contractors to engage in race and gender affirmative action – and directed the Office of Federal Contract Compliance Programs (OFCCP) to immediately cease enforcing it. Read more here.
  • Labor Department follows suit (Jan. 24). Acting Secretary of Labor Vince Micone ordered all OFCCP employees to cease and desist any and all investigative and enforcement activity under the revoked 1965 executive order. Read more here.

Labor Relations

  • Trump summarily dismissed two key NLRB figures (Jan. 27). While the dismissal of National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo was widely anticipated, the unprecedented firing of Board Member Gwynne Wilcox raises significant procedural and policy questions for the federal labor agency in the short term and beyond.
  • Trump appointed William Cowen as NLRB Acting General Counsel (Feb. 3).
  • Wilcox launched a legal challenge to her termination (Feb. 5).
  • Cowen signaled a new policy direction (Feb. 14). The NLRB’s Acting GC rescinded more than a dozen policies endorsed by previous leadership, including positions on the legality of non-competition agreements and stay-or-pay provisions, whether college athletes should be considered employees, and more.
  • Anything else? These recent shakeups have created compliance confusion for some employers. Here’s what employers need to know about the current state of the NLRB – but stay tuned, because a federal judge reinstated Wilcox on March 6. While the Board can resume certain activities with a three-member quorum back in play, the Trump administration immediately appealed this decision, and this matter seems destined for a date at the Supreme Court for a final resolution.

Department of Labor + Workplace Safety

  • Trump nominated new OSHA and MSHA leaders (Feb. 12). Trump recently nominated David Keeling, a workplace safety veteran with experience at UPS and Amazon, to lead Occupational Safety and Health Administration, and Wayne Palmer, a former executive for an industrial minerals trade association, to take the helm at the Mine Safety and Health Administration.
  • The Senate confirmed Lori Chavez-DeRemer to lead the DOL (March 10). Trump surprised the business community in November just weeks after the election when he announced Chavez-DeRemer as his nominee to lead the U.S. Department of Labor. Her selection was met by skepticism by some in the employer community because she positions herself as a supporter of unions and labor rights.

Employee Defection and Trade Secrets

  • FTC committed to targeting noncompetes (Feb. 26). In a somewhat surprising development, the Federal Trade Commission announced that it intends to continue scrutinizing noncompete agreements and more. Federal Trade Commissioner Andrew Ferguson unveiled plans for a Joint Labor Task Force that will identify and prosecute labor-market practices the agency deems to be “deceptive, unfair, and anticompetitive” and harmful to workers. Read more here.

Artificial Intelligence

  • Trump appointed a new AI Czar (Dec. 5). David Sacks, a Big Tech veteran, Silicon Valley insider, and vocal advocate for deregulation, now shapes federal policy on emerging technology. As the nation’s first “AI & Crypto Czar,” Sacks will likely oversee a seismic transformation in how AI will be regulated and integrated across industries.
  • Trump rescinded Biden’s AI Order (Jan. 20). One of Trump’s first executive actions was revoking Executive Order 14110 (Biden’s comprehensive AI policy, which aimed at ensuring safe and ethical AI deployment). Read more here.
  • Trump announced huge AI infrastructure investment (Jan. 21). The day after Inauguration Day, Trump announced a $500 billion private-sector-led AI infrastructure investment. Read more here.
  • Trump issued a new AI order (Jan. 23). Trump’s AI executive order calls for a group of regulators to craft a new AI policy within six months intended to ensure “global AI dominance.”

Education

  • Trump’s first-week actions impacted K-12 schools (Jan. 20-24). The flurry of executive orders signed by President Trump during his first few days of his second administration not only touch on immigration issues and potential raids or enforcement activities on K-12 school campuses but also demand a revisitation of DEI policies, bathroom and locker room access rules, and gender ideology studies.
  • Feds rescind Title IX guidance impacting college athletic programs (Feb. 12). The U.S. Department of Education’s Office of Civil Rights (OCR) announced that Name, Image, and Likeness (NIL) payments will not be subject to Title IX gender equity requirements.
  • Education Department kicked off a new era of Title VI Enforcement (Feb. 14). The department’s OCR also promised to begin cracking down, starting February 28, on “overt and covert racial discrimination” in educational institutions receiving federal funding. The agency’s Feb. 14 “Dear Colleague” letter created compliance confusion for many schools across the country, especially regarding their diversity-related activities.

Conclusion

The Trump administration has showed no signs of slowing down, and we expect that to continue throughout the next 50 days and beyond.

EEOC’s Latest AI Guidance Sends Warning to Employers

May 23 - Posted at 9:00 AM Tagged: , , ,

Employers using or thinking about using artificial intelligence (AI) to aid with workplace tasks received another reminder from the federal government that their actions will be closely scrutinized by the EEOC for possible employment discrimination violations. The federal agency released a technical assistance document on Thursday warning employers deploying AI to assist with hiring or employment-related actions that it will apply long-standing legal principles to today’s evolving environment in an effort to find possible Title VII violations. What are the five things you need to know about this latest development?

1. EEOC Confirms That Employers’ Use of AI Could Violate Workplace Law

The EEOC started by confirming its crystal-clear position in its technical assistance document: an improper application of AI could violate Title VII, the federal anti-discrimination law, when used for recruitment, hiring, retention, promotion, transfer, performance monitoring, demotion, or dismissal. The EEOC outlined four instances where the use of AI during the hiring process – and one example during an employment relationship – could trigger Title VII violations:

  • resume scanners that prioritize applications using certain keywords;
  • “virtual assistants” or “chatbots” that ask job candidates about their qualifications and reject those who do not meet pre-defined requirements;
  • video interviewing software that evaluates candidates based on their facial expressions and speech patterns;
  • testing software that provides “job fit” scores for applicants or employees regarding their personalities, aptitudes, cognitive skills, or perceived “cultural fit” based on their performance on a game or on a more traditional test; and
  • employee monitoring software that rates employees on the basis of their keystrokes or other factors.

The agency didn’t say that these are the only types of workplace-related AI methods that could come under fire – or that these types of tools are inherently improper or unlawful. It did say, however, that preexisting agency regulations (the Uniform Guidelines on Employee Selection Procedures) that have been around for over four decades can apply to situations where employers use AI-fueled selection procedures in employment settings.

The agency said this is especially true in “disparate impact” situations – where employers may not intend to discriminate against anyone but deploy any sort of facially neutral process that ends up having a statistically significant negative impact on a certain protected class of workers.   

2. “Four-Fifths Rule” Can Be Applied to AI Selections

The EEOC pointed out that employers can use the “four-fifths” rule as a general guideline to help determine whether an AI selection process has violated disparate impact standards (and we apologize in advance for the impending use of math). The test checks to see if a selection process is having a disparate impact on a certain group by comparing the selection rate of that group with the most “successful” selection rate. If it’s less than four-fifths of that selection rate, then you might be subject to a disparate impact challenge. If that sounds confusing to you, here is the example provided by the EEOC.

Assume your company is using an algorithm to grade a personality test to determine which applicants make it past a job screening process.  

  • 80 White applicants and 40 Black applicants take the personality test.
  • 48 of the White applicants advance to the next round (equivalent to 60%).
  • 12 of the Black applicants advance to the next round (equivalent to 30%).
  • The ratio of the two rates is thus 30/60 (or 50%).
  • Because 30/60 (or 50%) is lower than 4/5 (or 80%), the four-fifths rule says that the selection rate for Black applicants is substantially different than the selection rate for White applicants – which could be evidence of discrimination against Black applicants.

Note, however, that the EEOC said that this kind of analysis is merely a rule of thumb. It’s a rudimentary way to draw an initial inference about the selection processes. If you end up finding problematic numbers, it should prompt you to acquire additional information about the procedure in question, according to the EEOC, and isn’t necessarily indicative of a definitive Title VII violation. Similarly, just because your numbers clear the four-fifths hurdle doesn’t mean that the particular selection procedure is definitely lawful under Title VII. It can still be challenged by the agency or a plaintiff in a charge of discrimination.

3. EEOC Encourages Proactive Self-Audits

In a statement accompanying the release of the technical assistance document, EEOC Chair Charlotte Burrows said that employers should test all employment-related AI tools early and often to make sure they aren’t causing legal harm. This doesn’t mean just using the four-fifths rule, but also using a thorough auditing process involving a variety of potential examination methods on all AI functions. “I encourage employers to conduct an ongoing self-analysis to determine whether they are using technology in a way that could result in discrimination,” she said.  

But not mentioned by the EEOC: a reminder that you should approach any self-audit with the help of legal counsel. Not only can experienced legal counsel help guide you about the best methodologies to use and assist in interpreting the results of any audit, but using counsel can help cloak your actions under attorney-client privilege, potentially shielding certain results from discovery. This can be especially beneficial if you identify changes that need to be made to improve your process to minimize any unintentional impacts.

4. You’re On the Hook For Problems Caused by Your AI Vendors

The agency also noted quite clearly that you can’t duck your responsibilities by using a third party to deploy AI methods and then blaming them for any resulting discriminatory results. It said that you may still be responsible if the AI procedure discriminates on a basis prohibited by Title VII even if the decision-making tool was developed by an outside vendor.

“In addition,” said the EEOC, “employers may be held responsible for the actions of their agents, which may include entities such as software vendors, if the employer has given them authority to act on the employer’s behalf.” This may include situations where you rely on the results of a selection procedure that an agent administers on your behalf.

The EEOC recommends that you may want to specifically ask any vendor you are considering to develop or administer an algorithmic decision-making tool whether steps have been taken to evaluate whether that tool might cause an adverse disparate impact. And it also recommends asking the vendor whether it relied on the four-fifths rule of thumb or whether it relied on a standard such as statistical significance that is often used by courts when examining employer actions for potential Title VII violations.

5. EEOC’s Guidance is Part of Bigger Trend

This technical assistance document is part of a bigger trend we’re seeing from federal agencies that are increasingly interested in the ways that AI may lead to employment law violations. Just last month, in fact, EEOC Chair Burrows teamed up with leaders from the Department of Justice, the Federal Trade Commission and the Consumer Financial Protection Bureau to announce that they would be scrutinizing potential employment-related biases that can arise from using AI and algorithms in the workplace.

And within the past year, the EEOC teamed up with the DOJ to release a pair of guidance documents warning that relying on AI to make staffing decisions might unintentionally lead to discriminatory employment practices, including disability bias, followed by the White House releasing its “Blueprint for an AI Bill of Rights” that aims to protect civil rights in the building, deployment, and governance of automated systems.

While none of these guidance documents create new legal standards or can be relied upon with the force of law like a statute or regulation, they do carry weight, may signal where the agencies are focusing their enforcement efforts, and can be cited to by agencies and plaintiffs’ attorneys as best practices that employers should follow.  And states have gotten into the action too, with New York City’s law set to take effect in July, and a new bill advancing towards the Governor in California. And for that reason, you should take this guidance seriously and adapt your employment practices as necessary to stay up to speed with the pace of change that is rapidly unfolding before our eyes.

 

Workplace Law Predictions For 2019

January 09 - Posted at 7:15 PM Tagged: , , , , , , , , , , , , , ,

Courtesy of Fisher Phillips LLP

2018 has seen quite a few changes in labor and employment law. But with the New Year having just rung in, it’s time to look forward rather than backward. The question on the tip of everyone’s tongue is: what’s next? Here are our predictions for what to expect in 2019 when it comes to workplace law.

Expect More Class Actions

We’re going to start out with the bad news. Because of the potential for a big payout, class and collective actions are a favorite for plaintiffs’ attorneys. You should not expect that to change in 2019.

The California Supreme Court’s decision in Troester v. Starbucks Corporation has opened up even more avenues for potential wage and hour claims in the Golden State, and the trend could hit the rest of the country, too. In July 2018, the California Supreme Court narrowed the scope of the de minimus doctrine under state law and held that employees must be paid for off-the-clock work that regularly lasts several minutes per day. While the California Supreme Court refused to shut the door entirely on the de minimus doctrine, it noted that technological advances should help employers track small bits of time, and that employers can restructure work to avoid off-the-clock time.

Employers outside of California may see plaintiffs’ attorneys attempting to use the same rationale employed by the California Supreme Court to argue that the de minimus doctrine should not apply in the circumstances of their case. Moreover, with more employees having remote access to emails and other mobile platforms, the number of ways for employees to argue that they were working off the clock has increased. 

The Ascendance Of Arbitration Agreements 

One way for employers to avoid class actions is through arbitration agreements. Last May, the Supreme Court ruled in Epic Systems Corporation v. Lewis that mandatory class action waivers in arbitration agreements are enforceable. As a result, you can expect to see an increase in the number of companies rolling out updated agreements to include class action waiver language. (Note: if you have not had your arbitration agreement reviewed since May when Epic Systems came out, make it your New Year’s Resolution to do so.)

However, while popular with employers, arbitration agreements are decidedly not so with the plaintiffs’ bar. Expect to see plaintiffs’ counsel becoming more creative in challenging arbitration agreements on grounds related to unconscionability. 

We may even be starting to see a backlash against arbitration agreements. Most recently, some law students have been pressuring big law firms to do away with them when it comes to their own hires. And last year, the California legislature passed a law banning mandatory employment arbitration agreements for claims arising out of alleged violations of the Fair Employment and Housing Act or California Labor Code. Although the bill was ultimately vetoed by outgoing Governor Jerry Brown, expect to see the fight continue in 2019.

Don’t Look To Congress To Lead The Way

With Democrats controlling the House, and Republicans controlling the Senate and Executive Branch, you can expect that most employment legislation will be dead on arrival. When it comes to innovative legislation impacting the workplace, you should look to the states to lead the way. This is not to say that there won’t be any changes to labor and employment law on the federal level in 2019. However, we expect the most significant changes to be made by agencies (such as the National Labor Relations Board, the Department of Justice, the Equal Employment Opportunity Commission, etc.) rather than Congress.

NLRB Will Narrow The Definition Of Joint Employer

One of those agencies—the NLRB—made noise last year when it published a proposed rule that would alter the definition of joint employment to make it more difficult to hold multiple businesses responsible for alleged labor and employment law violations by staffing companies, franchisees, and other related organizations. Expect to see continued movement and updates on this proposed rule in 2019. 

But before getting too excited at any potential changes, you should keep in mind that states may have their own rules regarding joint employment that could differ from what the NLRB comes up with. Any new rules may not affect your organization’s liability under state law.

USDOL Has A Full Plate

Another agency you should keep an eye on is the U.S. Department of Labor (USDOL).  Not only is the USDOL considering its own joint employment rule, but the agency has proposed regulations regarding the regular rate of pay and white collar exemptions (also known as the “overtime” rule). 

The regular rate of pay is of particular importance to employers because it is used to calculate the overtime rate of non-exempt employees. While we know that changes to the proposed regulations are targeting sections 7(e)(2) and 7(g)(3) of the Fair Labor Standards Act, the USDOL has been rather vague about what the proposed regulations will look like. The USDOL states that they aim to “provide employers more flexibility in the compensation and benefits packages they offer employees” and “lessen litigation regarding the regular rate.”   

The regulation relating to the white collar exemption is less opaque. As employers may recall, the minimum salary threshold for white collar exemptions was supposed to increase from $455 per week (or $23,660 annually) to $913 per week (or $47,476 annually), with the amount to be updated every three years. However, right before these changes were scheduled to take effect in December 2016, a federal court blocked their implementation. Under a new administration, we expect that we will see a more modest proposed increase in the white collar exemption in 2019—perhaps in the low $600s per week. 

Paid Sick Leave Will Continue To Be On Trend

Although there are no federal laws mandating paid sick leave (yet), you can expect that paid sick and family leave will continue to be a big issues, with states and localities picking up the slack. Right now, 11 states and the District of Columbia require paid sick leave. Additionally, various cities and counties have stepped in where states have not provided for such leave or to give more generous benefits than the state. 

You generally should anticipate an expansion of paid sick leave benefits in 2019. The New Jersey Paid Sick Leave Act went into effect October, while Michigan, Washington, and Westchester County (NY) have paid sick leave laws going into effect this year. 

While some municipalities in Texas want to get in on this trend, a Texas appeals courtruled the Austin Paid Sick Leave Ordinance violates the state constitution because it preempts the Texas Minimum Wage Act. San Antonio passed its own sick leave ordinance in 2018, but it may only be a matter of time before it, too, is challenged in court. 

Privacy Issues Remain Paramount

The EU General Data Protection Regulation (GDPR) went into effect in May 2018, ushering in sweeping reforms for companies that do business in the EU or employ EU residents. The GDPR threatens strict penalties for non-compliance—up to the greater of 20 million Euro or 4 percent of global annual turnover in the prior year. Having been in effect less than a year, it is still not clear how fines will be assessed and what the potential exposure will be for companies that are found to be non-compliant. As 2019 progresses, you can expect to see many investigations that began in 2018 come to a close, and we’ll begin to get a better idea of how regulatory authorities will assess fines for non-compliance—including whether the fearsome 4 percent penalty will be assessed.   

Lest you think the major developments in privacy are safely across the ocean in Europe, you can be sure there will be plenty of action closer to home in 2019. The Illinois Supreme Court currently has a case before it over whether a technical violation of the Illinois Biometric Information Act (BIPA) gives standing to sue absent a person suffering a concrete injury. If the court answers in the affirmative, you can expect to see a continued proliferation of BIPA class actions.

Further, California passed the California Consumer Privacy Act (CCPA) in 2018, which goes into effect at the beginning of 2020. While the law is not as comprehensive as the GDPR, California employers will soon need to figure out this year if it applies to them. You should take compliance seriously: the CCPA allows consumers whose rights have been violated under the Act to bring suit for actual damages or statutory penalties (whichever is greater) under a mechanism somewhat akin to a California Labor Code Private Attorneys General Act. You can expect the proliferation of CCPA lawsuits will be on next year’s list of predictions. 

 

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