The State of Employment Law: Illinois Provides the Strongest Criminal Conviction Protections in the Country
Many states have some protections in place for employees and applicants with criminal convictions, ranging from ban-the-box laws that prohibit inquiries into criminal records until the interview stage to opinion letters that adverse employment decisions based on conviction record have an adverse impact on minority applicants and employees. But no state goes as far with these protections as Illinois, which has explicitly included conviction record as a protected class pursuant to the Illinois Human Rights Act (the “Act”).
The Act declares it a civil rights violation for any employer to refuse to hire, discipline, or terminate an applicant or employee based on a conviction unless: (1) there is a substantial relationship between the conviction and the job or (2) hiring the applicant or continuing to employ the employee would involve an unreasonable risk to property or the safety and welfare of specific individuals or public safety.
Before refusing to hire an applicant or terminating an employee based on a criminal history, regardless of the severity of that history, an Illinois employer must go through a detailed interactive process. It must consider the length of time since the conviction(s), the number of convictions, the nature and severity of the conviction(s), the facts surrounding the conviction(s), the age of the individual at the time of the conviction(s), and evidence of rehabilitation efforts. It must send the employee a pre-adverse action letter informing the applicant or employee of the reasoning behind the potential adverse action and providing the applicant or employee a chance to provide information.
Once the applicant or employee has had such a chance, if the employer still wishes not to hire the applicant or to terminate the employee, the employer must send another letter that again explains the decision-making process, details any appeal rights in place, and notifies the applicant or employee that they have the right to file a charge of discrimination with the Illinois Department of Human Rights.
Notably, the Act does not require Illinois employers to hire every applicant with a conviction or absolutely prohibit such employers from disqualifying applicants based on their conviction records. However, it puts stringent rules in place for the process an employer must use to make its decision. As such, Illinois employers must pay special attention to their hiring processes to ensure that applicants are not automatically rejected because of a conviction, even a serious one.
Federal Courts Quash Administrative Subpoenas and Review First Amendment Subpoena Challenge, Paving the Way for Future Investigatory Subpoena Contests
Highlights
On Sept. 9, 2025, the Western District of Massachusetts issued In re: Administrative Subpoena No. 25-1431-019, quashing an administrative subpoena that sought the production of information related to the provision of gender-affirming care at Boston Children’s Hospital and finding that the federal government failed to show a proper purpose for the subpoena.
On Oct. 27, 2025, the Western District of Washington rejected a similar administrative subpoena on the same grounds in QueerDoc, PLLC v. U.S. Department of Justice, after the federal government sought broad categories of documents related to gender-affirming care from a telehealth provider.
Both cases are outliers in that recipients of administrative subpoenas do not often file motions to quash because the standard for enforcement of a subpoena is a low bar for the government to meet, while the standard for proving that the government issued the subpoena for an improper purpose is difficult to satisfy.
In a rare move, two federal district courts quashed administrative subpoenas, finding they were issued for an improper government purpose. On Dec. 2, 2025, the Supreme Court will hear oral arguments in a third case involving a First Amendment challenge to a state subpoena, addressing the scope of government subpoena authority and the options available to subpoenaed entities seeking to challenge investigatory subpoenas.
The District Court Cases
In re: Administrative Subpoena No. 25-1431-019 and QueerDoc, PLLC v. U.S. Department of Justice involve similar issues but two different types of healthcare providers. The federal government issued broad subpoenas to these providers pursuant to 18 U.S.C. Section 3486, a statute authorizing the issuance of an administrative subpoena “[i]n any investigation of . . . a Federal health care offense.” The stated purpose of both subpoenas was to investigate illegal off-label promotion of drugs in violation of the Food, Drug, and Cosmetic Act, and improper billing under the False Claims Act in the context of gender-affirming care. The states in which the subpoenas were issued (Massachusetts and Washington) have statutory or constitutional protections, or both, for gender-affirming care. Each district court noted the numerous public statements and Executive Orders expressing disapproval of gender-affirming care issued by the current administration in the preceding months. Against this backdrop, both courts quashed the subpoenas, finding that the subpoenas were issued for an “improper purpose” and motivated by “bad faith.”
The Administrative Subpoena case emphasized that any subpoena issued under Section 3486 “must be limited to the healthcare fraud that is authorized [for investigation] by the statute: fraudulent billing codes and unlawful off-label promotion.” That court ultimately concluded that the government failed to show a proper purpose for the subpoena by pointing to the overly broad requests; the lack of evidence that Boston Children’s Hospital was “actually engaging” in the alleged illegal activity; the current administration’s “explicit” disapproval of gender-affirming care; and the conflict between the stated purpose of the subpoena and the gender-affirming care protections built into the Massachusetts constitution. Instead, the district court found that “[i]t is abundantly clear that the true purpose of issuing the subpoena is to interfere with the Commonwealth of Massachusetts’ right to protect [gender-affirming care] within its borders, to harass and intimidate [Boston Children’s Hospital] to stop providing such care, and to dissuade patients from seeking such care.”
In QueerDoc, the district court quashed the subpoena on similar grounds, citing public statements from the Administration opposing gender-affirming care, the breadth of the requests, and a “mismatch” between the government’s “stated investigation” and QueerDoc’s “actual operations.” Notably, while QueerDoc can prescribe medications as a telehealth provider, it does not manufacture or distribute medication, and it does not submit insurance claims. Therefore, the court found that QueerDoc’s operations were not within the purview of the government’s investigation, which was specifically focused on “manufacturers and distributors engaged in misbranding” and “providers submitting false insurance claims.” Overall, the Western District of Washington found that the government “has abandoned good faith investigation in favor of policy enforcement through prosecutorial coercion” and that the “subpoena serves to pressure providers to cease offering gender-affirming care rather than to investigate specific unlawful conduct.”
Both cases signal enhanced judicial scrutiny of the government’s stated purpose for issuing an administrative subpoena and create additional grounds for challenging government subpoenas.
First Choice Women’s Resource Centers, Inc. v. Platkin
On Dec. 2, the Supreme Court will hear oral arguments in First Choice Women’s Resource Centers, Inc. v. Platkin. This case involves a state-issued subpoena rather than one issued by the federal government. There, the New Jersey Attorney General issued a subpoena to a pregnancy center that included a request for donor information. The pregnancy center initially filed an emergency action in federal court, raising First Amendment claims under 42 U.S.C. Section 1983. The district court held that the action was not ripe because the state court had not yet enforced the subpoena. Simultaneously, the New Jersey state court enforced the subpoena without reaching the constitutional questions. After prolonged proceedings, the Third Circuit found that First Choice’s claims were still unripe due to the ongoing state proceedings and because the constitutional claims could be asserted and addressed in state court. First Choice maintains that the Third Circuit’s ruling deprives it of a federal forum in which to raise its constitutional claims.
The key question in front of the Supreme Court is whether the recipient of a state investigatory subpoena can immediately challenge the subpoena on First Amendment grounds in federal court or if the recipient must first litigate such constitutional claims in state court. Like Queerdoc and In re: Administrative Subpoena, the Supreme Court’s decision will address the scope of a government’s subpoena power and a subpoenaed entity’s avenues for challenging an investigatory subpoena.
Practical Implications
These cases are particularly meaningful for recipients of government subpoenas. Historically, recipients have had very limited options to challenge a government subpoena, and moving to quash a government subpoena was rarely a successful endeavor. Now, with at least two recent favorable rulings, subpoenaed individuals or entities have a clearer path to challenge investigative subpoenas issued for a potentially “improper purpose” or in “bad faith.” This may prompt more recipients to move to quash investigative subpoenas on similar grounds.
The district court rulings are most likely to affect investigations with a perceived political purpose. If those types of investigations continue, courts will probably see an uptick in recipients challenging government subpoenas issued in connection with those investigations. As a result, the federal government may be required to more clearly articulate the purpose of a given subpoena and the scope of its requests to ensure that the subpoena is facially consistent with that purpose and the government’s investigatory powers.
If the government successfully challenges the district court rulings on appeal, the status quo is unlikely to change significantly. Investigative subpoenas will remain difficult to contest, and courts will continue to enforce them.
The decision in First Choice Women’s Resource Centers will carry its own unique consequences. If the Supreme Court rules against the pregnancy center, investigative targets will continue to have limited access to federal courts to raise federal constitutional challenges to state-issued subpoenas. Governmental entities likely would be free to issue broad investigative subpoenas that would be largely insulated from federal judicial review (at least for state-issued subpoenas) or that would avoid such federal review for a lengthy period while the challenge wends its way through the state trial and appellate courts.
If the Supreme Court rules in favor of the pregnancy center, then entities would have expanded access to a federal forum for state subpoenas allegedly issued in violation of a federal constitutional right. At the same time, this could lead to a flood of challenges to state-issued subpoenas in federal courts and potentially overload the federal court system. This could also frustrate the ability of state governments and agencies to timely investigate violations of, and enforce, their own laws. This frustration and inefficiency will be compounded for states with limited resources to devote to such investigations. More stringent requirements for subpoenas would also mean that state agencies would need to comply with the new or modified subpoena parameters or risk jeopardizing their investigations.
ECHR Climate Decision – Five Key Takeaways for Companies
A recent European Court of Human Rights (ECHR) decision on the obligations of European states to study carbon-intensive permitting decisions crystallizes how global climate commitments may be beginning to harden into justiciable standards in some jurisdictions.
The ECHR’s judgment in Greenpeace Nordic v. Norway continues a trend in which courts reviewing climate issues grapple with the consequences of greenhouse gas emissions by requiring project-specific information be made available before government decisions are taken. Even though the judgment only directly impacts European countries, the ECHR’s judgment has at least five practical implications for governments and carbon‑intensive businesses.
Downstream combustion emissions are increasingly required in environmental assessments. Quantifying “Scope 1,” (direct emissions) “Scope 2,” (indirect emissions from purchased energy) and even “Scope 3” (other indirect emissions) is becoming routine in many multinational businesses. Courts across various jurisdictions now expect agencies, and, by extension, developers supplying the record, to quantify and analyze downstream emissions, address cumulative and transboundary effects, and situate those impacts against applicable climate targets. The ECHR has joined them.
The timing of climate-related challenges matters. While the ECHR rejected the substance of Greenpeace Nordic’s challenge as it was mounted, it accepted implicitly that later Norwegian processes would need to evaluate project-specific impacts in ways which could result in the imposition of more stringent conditions for a project’s operation or even an outright denial.
The decision emphasizes that, in Europe, public participation remains a core compliance issue and influences whether a project should be granted government permission to operate. Early, transparent presentation of climate impacts, alternatives, and mitigation reduces procedural vulnerability and aligns with social expectations in the European context that projects will generally seek to mitigate additional climate impacts.
Integrate climate diligence into investment decisions. The ECHR framework now expects Plan for Development and Operation submissions to incorporate stress‑testing against Paris Agreement‑consistent price trajectories and climate risk — an approach consistent with investor expectations and emerging due‑diligence regimes.
The decision presents a reminder that viewing trends in a single country likely generates an unwarranted level of certainty as to what the future holds. Anticipate cross‑pollination and even where ultimate remedies differ by forum, a common procedural core is taking shape. Quantify Scope 1–3 emissions, assess cumulative or transboundary effects, and disclose these early as regulators may reserve the right to revoke permits for projects when project-specific environmental assessments indicate that the project could contribute directly or indirectly to climate change.
The Decision
Greenpeace Nordic targeted Norway’s 2016 decision to award 10 petroleum exploration licenses in the Barents Sea. Two non-governmental organizations and six individuals argued that Norway breached Articles 2 and 8 of the European Convention by authorizing activities that ultimately drive greenhouse gas emissions, including downstream combustion abroad.
The case hinged on whether Article 8 — dealing with private and family life — obligates a state to act to address climate impacts from “potentially dangerous” activities. The court held that Article 8 applies to climate risks where there is a sufficiently close link between state authorization and serious adverse effects on life, health, well‑being, or quality of life. It accepted that exploration licenses are a necessary step toward extraction and eventual combustion and that this chain is adequate to trigger procedural protection, even if multiple approvals intervene and some licenses are later relinquished. Organizational applicants had standing but the individual plaintiffs did not as their injuries were, in essence, too removed from the issues they challenged.
Having accepted that Article 8 obligates states to address climate, the ECHR held that, before authorizing potentially dangerous activities, states subject to the European Convention must ensure an adequate, timely, good‑faith, and comprehensive assessment, grounded in best available science, that (1) quantifies anticipated greenhouse gas emissions, including exported combustion emissions, (2) evaluates compatibility with national and international climate duties, and (3) enables informed public participation when all options remain open. The court aligned these requirements with converging international jurisprudence (including advisory opinions from the International Tribunal for Law of the Sea, the International Court of Justice, and the Inter‑American Court) and with European impact assessment law, emphasizing cumulative and transboundary effects and early, strategic scrutiny.The recent ICJ decision, which effectively transformed climate change from a political issue to a legal one, established that states have a binding legal duty to prevent significant harm. (Our summary of the ICJ Advisory Opinion is here.)
Applying those standards to Norway’s Barents Sea licensing, the ECHR found no violation, accepting Norway’s choice to conduct comprehensive climate review at a later, project‑specific stage. Because later stages of Norway’s licensing proceedings required a project‑level environmental impact assessment before extraction, including exported combustion emissions and public consultation, the ECHR saw no structural deficiency in Norway’s framework as climate issues could be evaluated later.
Climate in International Law
The COP30 conference this week will discuss aligning national policies with a rights-based need to hold an increase in temperatures to 1.5°C. The COP30 agenda emphasizes a need to prevent foreseeable harm from climate volatility, to conduct rigorous, lifecycle climate impact assessments that encompass exported combustion emissions, and to ensure meaningful public participation and access to information in governmental project approvals. This approach largely squares with the ECHR’s approach in Greenpeace Nordic.
The Greenpeace Nordic decision also squares with a host of other recent international decisions.
It cites the ECHR’s 2024 ruling in Verein KlimaSeniorinnen, which recognized Article 8’s application to climate harms and articulated due‑diligence minimum guardrails for state mitigation action. (We discussed this case before here.) In Greenpeace Nordic, the court adapted those guardrails to the licensing or assessment pipeline for fossil projects, focusing on procedural integrity rather than setting substantive production or phase‑out mandates.
Greenpeace Nordic echoes the European Free Trade Association court’s 2025 advisory opinion that downstream combustion emissions are “effects” that must be captured by project environmental impact assessments (EIAs) for petroleum developments, and it nodded to the UK Supreme Court’s Finch v. Surry County Councildecision requiring consideration of combustion emissions in an EIA for an onshore oil project.
Comparison With Recent US Litigation
Recent US climate cases both converge and contrast with the Greenpeace Nordic decision. Some examples include the following.
In its unanimous 2025 ruling in Seven County Infrastructure Coalition v. Eagle County, the US Supreme Court recalibrated the National Environmental Policy Act’s (NEPA) scope by directing “substantial deference” to agencies on the breadth and detail of environmental reviews and by limiting required analysis to effects proximately caused by the project under review — excluding upstream and downstream impacts from “separate projects” outside the agency’s statutory authority. Framed as a procedural “course correction,” the decision emphasizes NEPA’s role as an informational process, not a substantive constraint, and signals that courts should not micromanage agencies’ choices about indirect and cumulative effects so long as the agency’s decision is reasonable and reasonably explained. This is in tension with the Greenpeace Nordic v. Norway approach, which requires states to conduct rigorous climate impact assessments, allow for meaningful public participation, and pay explicit attention to exported combustion emissions. (We discuss Seven County Infrastructure Coalition here.)
The Ninth Circuit’s 2020 decision in Juliana v. United States rejected youth plaintiffs’ constitutional claims for lack of Article III redressability, stressing separation‑of‑powers limits on ordering the United States to undertake a comprehensive, court‑managed decarbonization plan. The ECHR’s decision goes one step further: setting procedural minimums for climate‑relevant decisions. However, both decisions leave substantive policy decisions to other branches of government. Where Juliana treats broad, structural climate relief as institutionally non‑justiciable, Greenpeace Nordic accepts that rigorous climate assessment, quantification of downstream emissions, and early public input may be legally required.
Similar to Greenpeace Nordic, in Held v. State of Montana, the Montana Supreme Court invalidated statutory prohibitions on considering greenhouse gas emissions and their climate impacts in environmental reviews based on an explicit state constitutional right to a clean and healthful environment. (We summarized Held here.) Like Held, the Greenpeace Nordic approach obligates government decisionmakers to acknowledge climate effects. Held imposes a non‑discretionary duty to consider climate in environmental review, and Greenpeace Nordic imposes a similar duty. It adds specificity on exported emissions and cumulative effects yet tolerates timing flexibility if the later stage is robust and genuinely outcome‑determinative.
In a fourth case, Lighthiser v. Trump, out of Montana federal court, the court both accepted the potential that climate issues will injure plaintiffs and barred the plaintiffs’ requested declaratory and injunctive relief against a number of Trump Administration government-wide executive orders. (For more, see here.) ECHR’s deferral of remedy-related decisions to later phases focused on singular projects preempts the need for a broad injunction in favor of setting procedural minimums which can be later enforced.
New York City Council Approves Pay Equity Reporting Mandate – Awaiting Mayoral Mandate
On October 9, 2025, the New York City Council passed amendments to local laws that, if passed, would impose new pay equity reporting obligations on certain private employers and require the city to conduct annual pay equity studies. These measures are designed to identify and address wage disparities based on gender, race, and ethnicity. The amendments are now pending before the mayor, who has 30 days to sign, veto, or allow the amendments to become law automatically.
If the amendments become law, private employers with at least 200 employees that file EEO-1 Compone reports with the EEOC will be required to submit annual pay data reports to a city agency designated by the mayor. The data will align with information previously required under the EEOC’s EEO-1 Component 2 filings. The designated agency will be responsible for developing a reporting system and standardized form within a year of the law’s effective date. Employers will then have one year to submit their first reports and must file subsequent reports on an annual basis. Those who fail to comply risk civil penalties and being publicly listed on the agency’s website.
Additionally, the designated agency will conduct an annual pay equity study, analyzing the collected data to identify pay disparities and trends across industries and occupations. The agency will publicly release its recommendations, with any data presented in the aggregate to safeguard individual employee and employer identities.
US DOT Announces Changes to DBE Program
On Oct. 3, 2025, the U.S. Department of Transportation (DOT) issued an Interim Final Rule (IFR) fundamentally restructuring its Disadvantaged Business Enterprise (DBE) and Airport Concessions DBE (ACDBE) programs by eliminating race- and sex-based presumptions of social and economic disadvantage and replacing them with a uniform, individualized showing that the award is needed to redress the economic effects of actual previous discrimination for all applicants.
The IFR also mandates a one-time, nationwide reevaluation of all existing certifications, temporarily suspends the setting of contract goals and the counting of DBE/ACDBE participation toward goals until reevaluations are complete, and updates multiple program definitions, as well as reporting and goal-setting provisions.
These changes follow DOT and the Department of Justice’s (DOJ) determination that the statutory race and sex-based presumptions of disadvantage are unconstitutional. Existing and prospective DBE firms must now substantiate their social and economic disadvantage through a personal narrative and financial documentation. The Unified Certification Programs (UCP) performing certifications must promptly implement the new standards and recertify or decertify existing firms.
Background
On Sept. 23, 2024, the U.S. District Court for the Eastern District of Kentucky in Mid-America Milling Co. v. U.S. Dep’t of Transp, No. 3:23–cv–00072, 2024 WL 4267183 (Sept. 23, 2024) granted a preliminary injunction on the grounds that the DBE program’s reliance on race- and sex-based presumptions likely violates the Constitution’s guarantee of equal protection. The court held that Congress’s approach for identifying groups receiving a presumption of disadvantage was unexplained and had no logical endpoint; thus, the program was not narrowly tailored.
The IFR states that it is based on DOT and DOJ’s evaluation of the DBE and ACDBE programs in light of Mid-America Milling Co. decision, as well as similar decisions in Ultima Servs. Corp. v. U.S. Dep’t of Agric., 683 F. Supp. 3d 745 (E.D. Tenn. 2023) and Nuziard v. Minority Bus. Dev. Agency, 721 F. Supp. 3d 431 (N.D. Tex. 2024). The IFR states that effective Oct. 3, 2025, DOT is eliminating these presumptions from the DBE and ACDBE program regulations. On Oct. 24, 2025, following widespread confusion and varying interpretations of the IFR’s requirements by UCPs, DOT also released FAQs clarifying the rule. This GT Alert summarizes the key changes to the DBE program and what currently certified DBE firms might expect.
Key Updates
Removal of Race-and-Gender Based Presumptions
Under the IFR, 49 C.F.R. Parts 23 and 26 now require a case-by-case finding of “socially and economically disadvantaged” (SED) status for every applicant, without reliance (in whole or in part) on race or sex. Where the burden was once on a certifier to prove that an individual in a group presumed to be disadvantaged was not disadvantaged, the burden is now on the applicant firm to prove their SED status.
All applicants must submit a personal narrative demonstrating disadvantage, by a preponderance of evidence, using specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business (including impediments in obtaining financing on terms available to similarly situated non-SED businesses). Applicants must state “how and to what extent the impediments caused the owner economic harm, including a full description of type and magnitude.”
Mandatory Reevaluation of Certified DBEs
All currently certified DBEs and ACDBEs will be required to undergo recertification under the new eligibility standard. Certifiers must provide these firms with an opportunity to submit documentation under the new standards, determine eligibility, and issue written recertification or decertification decisions. Certain states, such as Virginia, released notices regarding the IFR and the requirement to submit a personal narrative. These notices stated that firms that fail to comply with recertification requirements would be decertified without the opportunity to have a hearing. However, DOT clarified in its Oct. 24, 2025, update that DBEs decertified under the reevaluation procedures are still entitled to appeal their decertification under 49 C.F.R. § 26.89.
Suspension of DBE Goals
In order to prevent existing DBEs and ACDBEs from continuing to receive benefits based on their certification under the old standard, contracting goals will be suspended until a DOT funding recipient’s UCP completes all DBE and ACDBE recertifications. Until then, recipients of DOT funding cannot set contracting goals for DBEs or ACDBEs or count any participation toward overall goals.
Immediate Effects on Contracting and Compliance
DOT funding recipients and certified DBEs must take immediate steps to comply with DOT’s recent changes. For contracts that have been advertised but not yet awarded (i.e., bids have not yet opened), recipients are required to amend advertisements to remove any DBE contract goals. If bids have been opened but contracts are not yet awarded, recipients must zero out the DBE goal. DOT has stated that it will allow recipients to amend said contracts without readvertising them, but that each recipient should make its own determination as to whether the contract needs to be recompeted under state law.
Contracts executed before Oct. 3, 2025, do not require any modification; however, DBE participation on such contracts may not be counted toward either the contract goal or the DOT funding recipient’s overall DBE goal until the relevant UCP has fully completed the reevaluation process. During this period, recipients are not required to conduct commercially useful function reviews of DBE work.
Importantly, DOT’s DBE termination provisions remain in effect: prime contractors may not terminate a DBE or reduce its scope without prior written consent from the recipient and a showing of good cause. For design-build projects, if DBE subcontracts were signed before Oct. 3, 2025, those agreements may proceed, and DBEs may not be terminated except under the same consent and good-cause rule.
Lastly, recipients must include the nondiscrimination and assurance clauses required by 49 CFR §§ 23.9 and 26.13 in all contracts awarded on or after Oct. 3, 2025, and continue to comply with the prompt payment requirements in 49 CFR § 26.29 throughout the UCP reevaluation period. Despite these changes to the DBE program, the IFR does not affect any joint venture or subcontracting agreements DBE firms may currently have in place. DBEs and government contractors partnering with DBEs may wish to consult with counsel for further guidance before unilaterally modifying performance under said agreements.
Texas’ Suspension of ‘Historically Underutilized Business’ Certifications Impacts State Contracting Processes
Takeaways
The Texas comptroller suspended certification and recertification of Historically Underutilized Businesses (HUB) for state procurements.
HUB-certified businesses remain eligible for state contracts pursuant to the statute that provides for education and training, but no contract preferences or quotas.
The comptroller will continue to collect business participation data while conducting a detailed review of the program’s legal framework given recent prohibitions of DEI programs in Texas state government.
On Oct. 28, 2025, Acting Texas Comptroller Kelly Hancock announced that he was suspending certification of Historically Underutilized Businesses (HUBs) for state procurements pending a review of the program’s legal framework in light of recent court rulings and Texas Governor Greg Abbott’s Executive Order GA-55 prohibiting diversity, equity, and inclusion (DEI) programs in state government.
Although new certifications and requests for renewal are suspended, the comptroller’s office will continue collecting business participation data. The comptroller’s guidance makes clear that eligible businesses may continue to compete for state contracts and register with the Centralized Master Bidder’s List.
The Texas HUB program was signed into law by then-Governor George W. Bush in 1999. Pursuant to the statute, a HUB is a business that is at least 51% owned and controlled by one or more economically disadvantaged persons. A disadvantaged person is either (a) a racial or ethnic minority, a woman, or a service-disabled veteran, or (b) a person who has suffered the effects of discriminatory practices or other similar insidious circumstances over which the person has no control.
State agencies are required to notify HUB-certified businesses about upcoming procurements with a value of over $10,000 and to use “good faith efforts” to achieve state-specified goals for contracting with HUB-certified businesses. HUB-certified businesses must compete for contracts. They do not receive contracting preferences.
The guidance to state agencies reiterates that agencies may not award government contracts based on race, ethnicity, or sex, and that preferences are prohibited. The guidance also requires that the basis for each contract award be documented in the procurement file.
Next Steps
HUB-certified businesses should continue to identify and compete for state contracts.
Companies bidding on Texas state contracts with expected value of at least $100,000 must continue to comply with agency requirements for a HUB Subcontracting Plan, including making good faith efforts to implement the Plan.
Context Matters – Eighth Circuit Backs Home Depot’s Ban on BLM Apron Message Due To “Special Circumstances”
On November 6, 2025, the Eighth Circuit vacated and remanded a split decision from the National Labor Relations Board (“NLRB” or “Board”), holding that the Board improperly rejected Home Depot’s “special circumstances” and business-justification defenses to banning an employee’s BLM message on a customer-facing apron.
We previously covered the factual background of the underlying case and the NLRB’s decision, in which the Board held that Home Depot violated the employee’s Section 7 rights under the National Labor Relations Act (“NLRA” or the “Act”) by restricting the employee’s ability to wear the BLM insignia on their work attire.
In Home Depot U.S.A., Inc. v. NLRB, Nos. 24‑1406 & 24‑1513 (8th Cir. Nov. 6, 2025), the Eighth Circuit—in another decision reversing recent NLRB precedent (see other recent decisions here and here)—emphasized the time, place, and manner of the display, which was near Minneapolis during months of civil unrest following George Floyd’s murder in 2020, and concluded that this context justified a narrowly-tailored restriction on a politically-charged message in a customer-facing retail setting.
The Eight Circuit reasoned that the Board failed to “properly consider [the employee’s] BLM apron display in the context of this dispute at this location at this point in time.” Namely, the store was close in time and place to where Floyd was murdered and tensions were still high. Indeed, the court held that the Board’s conclusion “blinks reality” by ignoring that the BLM lettering was worn “in the midst of several months of protests, counter-protests, and civil unrest across the greater Minneapolis area after George Floyd’s notorious murder.”
The Eighth Circuit also held that the Board improperly applied precedent on balancing public image interests, effectively barring employers from regulating customer-facing interactions by employees—even when employers have a legitimate interest in how their customers perceive them and they offer employees reasonable alternative insignia pursuant to that interest.
Notably, the Eighth Circuit declined to address Home Depot’s other arguments on appeal, including that the employee’s conduct was not NLRA-protected activity, that its First Amendment rights were violated, and the Board’s remedies were overbroad. The Eight Circuit also declined to address whether, after Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which we covered here, it owed the Board’s decision a less deferential standard of review.
Takeaways
On its face, the Eighth Circuit’s decision is a reminder that context is key when employers seek to regulate employee work attire and messaging.Employers have more latitude to restrict employee work attire and messaging when done in a moment that, if they do not, could jeopardize personal safety, workplace security, or employer branding. When doing so, employers should be neutral, even-handed and non-discriminatory (especially if multiple instances similarly involve controversial statements).
Employees—union and non-union represented alike—enjoy Section 7 protections when wearing work attire with messages related to workplace issues, such as wages, hours, and other terms and conditions of employment under longstanding U.S. Supreme Court precedent. See Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945). That said, the NLRA permits employers to make business decisions preserving an apolitical workplace with the goal of advancing legitimate interests, such as customer and employee safety, providing that the restrictions are implemented in a non-discriminatory manner.
California Senate Bill 464 Sharpens State’s Pay Reporting Teeth
California Governor Gavin Newsom signed Senate Bill (SB) No. 464 into law on October 13, 2025, making significant changes as of January 1, 2026, to the state’s pay data reporting requirements. These changes will increase the pressure on covered employers and labor contractors to complete the annual reporting, as well as increase the complexity of the reporting requirements to include more immediate changes related to civil penalties and the storage of employee data.
Quick Hits
Beginning on January 1, 2026, employers and labor contractors will be required to separately collect and store any demographic information for California pay reporting so that the information is separate from employees’ personnel records.
As of January 1, 2026, when requested by California’s Civil Rights Department, courts will be required to impose civil penalties of $100 per employee for the first failure and $200 per employee for a subsequent failure to file required pay data reports.
Beginning January 1, 2027, employers will be required to classify all employees in one of twenty-three SOC job categories, and EEO-1 categories will no longer be used.
The biggest change will occur in 2027 when all employees must be placed into twenty-three Standard Occupational Classification (SOC) system categories, as the use of the EEO-1 categories for classifying employees will be discontinued. This will require substantial work by filers, as employers have traditionally mapped their employees to EEO-1 categories and not used SOC codes for employee mapping.
Senate Bill 464 amends Section 12999 of the California Code containing California’s pay data reporting requirements for payroll employers and labor contractors. The bill is actually two bills within the one bill: (1) the first bill which makes two major changes is effective January 1, 2026, will expire on January 1, 2027; and (2) the second bill which maintains the two major changes of the first bill and adds the critical SOC job classification change will be effective as of January 1, 2027, and has no expiration date. The three major changes in SB 464 are discussed below.
Changes Effective as of January 1, 2026
Demographic Information Storage
Employers must ensure that any demographic information gathered by employers or labor contractors for California pay reporting “shall be collected and stored separately from employees’ personnel records.” While some employers might have previously separated California pay reporting data from employee personnel records, this was not previously required. The scope of this requirement will likely be explained in more detail through guidance in the form of answers to frequently asked questions (FAQs) and other future guidance issued by California’s Civil Rights Department (CRD), which administers pay data reporting in the state. However, as currently stated, this requirement is broad and covers all data connected to the annual pay reporting requirement. Based on its effective date of January 1, 2026, employers and covered labor contractors may want to consider implementing plans to keep this data separate from regular personnel files.
Mandatory Imposition of Civil Penalties
The prior pay reporting requirements under Section 12999 stated that a court “may impose” a civil penalty of $100 per employee for the first infraction and $200 per employee for the second and subsequent infractions related to failures to file reports. Senate Bill 464 makes the imposition of these civil penalties mandatory when CRD makes this request to a court. Specifically, the bill states that upon request by CRD, “a court shall impose a civil penalty.” This means that penalties will be much easier to obtain as the court’s discretion to impose penalties will be removed. The mandatory nature of penalties will increase pressure on payroll employer filers, but it would seem to especially ratchet up the pressure on labor contractor filings. This pressure may lead to significantly increased demands by employers for their labor contractors to provide the necessary reporting data. It may also result in increased employer reporting of labor contractors to CRD where labor contractors do not supply the necessary reporting data.
Changes Effective as of January 1, 2027
Discontinued EEO-1 Categories and Implementation of SOC Codes
Effective January 1, 2027, pay reporting will no longer rely on EEO-1 categories; instead, all employees must be classified into one of twenty-three job categories. These twenty-three categories are based on SOC categories and are a significant expansion from the ten options provided by the EEO-1 categories. Based on the effective date of this change, the 2026 pay reports due to be filed on or before May 12, 2027, will require the use of these twenty-three job categories. While these categories have been in use for some time, employers do not commonly use them to categorize their employees. While these categories have limited parallels to EEO-1 categories, their focus on the subject matter of the work performed differs significantly from the EEO-1 categories’ focus on corporate structure. For instance, the twenty-three categories include “Business and financial operations occupations,” “Computer and mathematical occupations,” and “Architecture and engineering occupations,” each of which could presumably span more than one of the existing EEO-1 categories. This illustrates the major shift in how employees will be classified, beginning with the 2026 pay reports. Based on this substantial shift in employee classification, filers—including both employers and labor contractors—may want to consider putting together plans to begin reclassifying employees into these twenty-three categories.
Conclusion
Senate Bill 464 makes three major changes to the existing California pay reporting requirements. These changes include making civil penalties mandatory when requested by CRD, which will increase pressure to complete these filings. Beginning in 2027, filers will be required to use twenty-three SOC categories to classify employees for reporting purposes instead of the EEO-1 categories currently in use. Collectively, these changes will increase the complexity of reporting while also increasing the potential risk for employers and labor contractors that fail to file the required pay data reports. The changes instituted by SB 464 continue California’s long-term work to continually update its pay reporting requirements, placing additional pressure on filers.
The Seven Year Itch: Recent Guidance on the Massachusetts Noncompetition Act
The Massachusetts Noncompetition Agreement Act (MNAA) took effect in October 2018, imposing certain statutory requirements for noncompete provisions to be enforceable. When the statute became law, many eagerly awaited case law guidance on how to interpret some of the murkier requirements.
Unfortunately, that guidance has been slow to come and, by and large, has not yet provided direct guidance on the biggest open questions, including what exactly satisfies the consideration requirements under the law.
Below, we discuss some of the recent case law from this year under the MNAA and what steps employers should take as a result.
An Overview of the MNAA
The MNAA provides that noncompete agreements are only valid and enforceable if they meet certain requirements.
All noncompetes that fall within the scope of the MNAA, regardless of when they are entered, must:
Be in writing and signed by both the employer and employee.
Expressly state that the employee has the right to consult with counsel prior to signing.
Be no broader than necessary to protect the employer’s legitimate business interests.
Extend for no more than 12 months post-employment (except in limited circumstances).
Be reasonable in scope of geography and proscribed activities.
Comply with the statute’s choice of law and venue requirements.
Be supported by “a garden leave clause or other mutually-agreed upon consideration.”
Valid noncompete agreements entered into at the time employment begins must also be provided to the employee by the earlier of the formal offer of employment or 10 business days before the commencement of the employee’s employment.
Valid noncompete agreements entered into after the commencement of employment must also be supported by “fair and reasonable consideration independent from the continuation of employment” and be provided at least 10 business days before the agreement is to be effective.
The MNAA also clarified that “noncompetition agreement” includes “forfeiture for competition” provisions, which are provisions which impose adverse financial consequences on a former employee only if the employee engages in competitive activities. The MNAA does not include non-solicitation provisions or “forfeiture agreements” in the definition of noncompetition provisions. Forfeiture agreements are those that impose adverse financial consequences on a former employee regardless of whether the employee engages in competitive activities.
Recent Decisions
Anaplan Parent LP, et al., v. Brennan (No. 2584-CV-02350; Massachusetts Superior Court, dated Sept. 11, 2025)
Summary: The court ruled that a noncompete provision contained in a former executive’s equity grant agreement was unenforceable under the MNAA. The court determined that the agreement was entered into between the executive and the parent company, rather than the subsidiary company that directly employed the executive. The court held that the agreement failed to adhere to the MNAA because the employer did not sign the agreement. In reaching its decision, the court held that although the term “employer” is undefined under the MNAA, it would not interpret the definition of “employer” to include parent or grandparent companies or similarly affiliated entities of the direct employer.
Facts: Anaplan Inc. and its parent/grandparent company Anaplan Parent LP moved to enforce a noncompete agreement that would prevent Timothy Brennan, a former employee, from working with Anaplan’s competitor.
Takeaways: The decision reinforces two concepts. First, the importance of adhering to the many technical requirements of the MNAA is critical because Massachusetts courts generally trend toward narrow enforcement of restrictive covenants and will be quick to invalidate those that do not comply. Second, the case provides critical insight on Massachusetts courts’ hesitancy to broadly interpret the definition of the term “employer.” To satisfy MNAA requirements, enforceable noncompete agreements must be signed by both the “direct employer” and “employee.”
Miele v. Foundation Medicine, Inc., SJC-13697, 2025 WL 1667748 (Jun. 13, 2025)
Summary: The Massachusetts Supreme Judicial Court (SJC) held that the MNAA does not apply to a forfeiture clause triggered by a breach of a non-solicitation agreement. The SJC reasoned that noncompetition agreements expressly do not include non-solicitation agreements, and forfeiture for competition agreements must therefore also exclude forfeiture for non-solicitation agreements.
Facts: Susan Miele received severance benefits in the amount of $1.2 million as part of her separation from Foundation Medicine, Inc (FMI). In exchange, Miele agreed to restrictive covenants, including a one-year non-solicitation provision that barred Miele from soliciting FMI employees to leave their employment for any reason. If Miele breached the non-solicitation provision, she would trigger a forfeiture clause and forfeit any then-unpaid benefits owed to her under the agreement, as well as allow FMI to seek repayment of all previously paid benefits. Miele subsequently began working for a competitor and recruited several FMI employees to join her. FMI ceased making further payments and demanded repayment of money provided to Miele. Miele sued for breach of contract and argued that the forfeiture clause was unenforceable under the MNAA.
Takeaways: Employers may use non-solicitation covenants with forfeiture provisions without triggering the MNAA’s technical requirements.
For a more detailed discussion of this decision and takeaways, please read our previous alert here.
Warren v. Zapata Computing, Inc., No. CV 23-13197-BEM, 2025 WL 1556040 (D. Mass. June 2, 2025)
Summary: A federal court ruled that counterclaims based on an employee’s violation of a noncompete provision failed because the agreement was unenforceable under the MNAA. The court held that no evidence established that the employee was expressly informed of the right to consult with legal counsel prior to signing the agreement.
Facts: The plaintiff, Michael Warren, sued his former employer Zapata Computing and several executives for violations of the Massachusetts Wage Act. Zapata Computing filed counterclaims alleging that, in relevant part, Warren violated a noncompete agreement.
Takeaway: The technical requirements of the MNAA will be enforced with specificity. Employers must ensure that employees are explicitly informed, in writing, of the right to consult with counsel prior to entering into a noncompete agreement.
Takeaways and Next Steps
Equity/Award agreements are in the crosshairs.
Many Massachusetts employers place restrictive covenants in equity grant documents issued by a parent/grandparent or holding company. In Massachusetts, those noncompetes are at risk if the employing subsidiary is not also a party and signatory. Companies should carefully examine noncompete covenants contained in equity or award agreements, particularly when those are the only restrictive covenants to which an employee is bound. If the parent/grandparent is the only employer side signatory to the agreement, companies will need to review whether the parent/grandparent would constitute an “employer,” and if not, take prompt steps to ensure there is an existing and enforceable noncompete agreement between the actual employer and the employee.
Employers should carefully comply with each of the technical requirements in the MNAA to ensure enforceability.
It is critical that employers carefully follow the specific technical requirements of the MNAA. Missing even one such requirement could invalidate the restriction in its entirety.
Carefully crafted forfeiture clauses do not run afoul of the MNAA.
Companies with employees in Massachusetts may now opt to incorporate or bolster the use of non-solicitation provisions accompanied by carefully drafted forfeiture clauses in agreements with employees in order to protect talent without triggering the MNAA.
Inside the Exclusive- The EEOC’s New Enforcement Priorities, Part 4—Gender Identity
In this podcast recorded at our recent Corporate Labor and Employment Counsel Exclusive® seminar, Tae Phillips (shareholder, Birmingham), Jim Paul (shareholder, St. Louis/Tampa), and Scott Kelly (shareholder, Birmingham) continue their discussion of the EEOC’s evolving enforcement priorities—with a particular focus on gender identity issues. Scott (who chairs the firm’s Workforce Analytics and Compliance Practice Group) analyzes recent executive orders, legal challenges, and the impact of Supreme Court decisions such as Bostock and Muldrow on workplace protections for transgender individuals. Scott also highlights the complexities faced by nationwide employers due to varying federal, state, and local laws, as well as the intersection of gender identity and religious objections in the workplace—which underscores the importance of staying informed about both legal developments and practical workplace challenges.
City of Seattle Secures Preliminary Injunction on DEI and Gender Executive Orders
On October 31, 2025, the U.S. District Court for the Western District of Washington halted enforcement of Section 3(b)(iv) of Executive Order 14173 (the “Diversity, Equity, and Inclusion (DEI) Order”) and Section 3(g) of Executive Order (EO) 14168 (the “Gender Order”) against the City of Seattle by granting a preliminary injunction.
In City of Seattle v. Trump, the court found the City of Seattle was likely to succeed on its Administrative Procedure Act claims, concluding that the challenged funding conditions exceeded statutory authority, implicated separation-of-powers principles, and were arbitrary and capricious.
The court ordered immediate remedial steps, declaring past implementation actions null and void and requiring a compliance status report within three days. The injunction is limited to the City of Seattle and does not extend nationwide; however, it sets the stage for future injunctive relief actions.
Quick Hits
The U.S. District Court for the Western District of Washington rejected federal agency positions that treat DEI-oriented, race-neutral, and transgender facility access as presumptively unlawful, noting that those interpretations conflicted with established precedent.
The court criticized EO 14173’s “materiality” clause, which declared global compliance with all anti-discrimination laws per se material to False Claims Act payment, as boilerplate adopted without reasoned analysis, tailoring, or consideration of reliance interests.
The court found EO 14168’s “gender ideology” restriction undefined and likely to chill lawful activities and enable arbitrary enforcement, which is incompatible with effective grant administration.
Background
EO 14173 directs federal agencies to incorporate into all grants and contracts a clause requiring recipients of federal funds to certify compliance “in all respects” with “all applicable Federal anti-discrimination laws” and to agree that such compliance is “material” to payment decisions for False Claims Act (FCA) purposes. Federal agencies implemented this directive with the City of Seattle via standardized terms, including the April 2025 Federal Transit Administration Master Agreement, which deems anti-discrimination compliance material to payment and requires recipients to certify they do not operate DEI programs that violate applicable law.
EO 14168 directs agencies to ensure that federal funds do not “promote gender ideology.” The U.S. Department of Housing and Urban Development (HUD) added this restriction to its grant terms with the City of Seattle and relied on the Homeless Assistance Act’s catchall provision—which permits “such other terms and conditions” deemed “necessary for effective and efficient administration”—as the legal basis.
The City of Seattle alleged that these measures jeopardized substantial federal funding for programs central to public safety, infrastructure, and social services, and cited recent HUD disapprovals and agency communications that increase enforcement risk tied to the executive orders.
The Court’s Analysis
Rejecting the government’s contention that EO 14173 simply restates obligations under Title VI of the Civil Rights Act of 1964, the court found federal agencies redefining “discrimination” to match the Executive’s view and using grant conditions and potential FCA liability to force recipients to follow that view. In particular, the court identified the U.S. Department of Transportation’s statement that policies designed to achieve DEI goals “presumptively violate[] Federal law,” and U.S. Department of Justice communications suggesting FCA risk for permitting transgender individuals to access facilities aligned with gender identity despite contrary appellate authority, and guidance treating race-neutral “proxies” as unlawful if intended to advance diversity goals. The court also identified direct conflicts between the DEI Order’s thrust and statutory directions in HUD programs that require attention to historically disadvantaged groups.
Turning to EO 14168, the court held that HUD could not use the Homeless Assistance Act’s catchall provision to add an ideological ban on “gender ideology.” The catchall provision covers only operational requirements—administration, accountability, confidentiality, school enrollment, and financial reporting—so the ban, the court found, likely falls outside its scope.
On review of the challenged funding requirements, the court found that the federal agencies likely departed from settled civil rights law without explanation, conditioned funding on ideology rather than statutory purposes, declared global anti‑discrimination compliance “material” to FCA payment without reasoned analysis or regard for reliance interests, and imposed an undefined, “politically charged” “gender ideology” ban that invited arbitrary enforcement and chilled lawful activity. The court denied requests for a bond and for a stay of the injunction.
Next Steps
While the ruling immediately pertains to the City of Seattle, it signals a judicial skepticism toward executive efforts to reshape substantive civil rights standards or expand FCA liability through grant and contract boilerplate lacking clear congressional authorization and reasoned analysis. Employers may want to carefully review current and forthcoming award terms referencing EO 14173 or EO 14168 and align program and workplace policies with settled law and controlling precedent. Where terms are vague, overbroad, or untethered to statutory purposes, employers may consider seeking clarification or revision.
Free After 43 Years Wrongfully Jailed: Why is ICE Deporting Subu Vedam?
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