Multistate Compliance Roundup: State Laws Will Take Effect July 1, 2025
A number of employment-related laws recently passed in various states that impact the workplace will take effect on July 1, 2025.
Quick Hits
New state laws will impact minimum wage, leaves of absence, restrictive covenants, child labor, and other workplace issues.
These laws will take effect on July 1, 2025.
Here is a roundup briefly summarizing the new state laws:
Alaska Ballot Measure 1 increases the minimum wage to $13.00 per hour, establishes paid sick leave, and prohibits employers from holding mandatory meetings to share political or religious opinions. Employers will be required to provide one hour of paid sick leave per thirty hours worked.
In California, Los Angeles County passed a Fair Workweek Ordinance, which includes predictive scheduling provisions. It requires employers to provide advance notice of schedule changes, premium pay for schedule changes, and rest time between shifts. It applies to retail businesses that have at least 300 employees worldwide. In addition, California’s minimum wage will increase to $17.81 per hour.
Indiana Senate Bill 409 requires employers to give workers time off to attend a school attendance conference or case conference meeting for their child. The time off can be unpaid.
Kansas Senate Bill (SB) 241 clarifies that certain nonsolicitation agreements with business owners and employees are presumptively enforceable and not a restraint on trade.
In New Hampshire, employers with six or more employees will be required to provide nursing mothers with a reasonable break time and a private, non-bathroom space to express milk for up to one year after their child’s birth. The law mandates an unpaid break of approximately thirty minutes for every three hours of work.
Oregon will increase its minimum wage to $15.05 per hour.
In Vermont, H. 704 requires employers with five or more employees to include wage ranges in job advertisements. Another law, H. 259, requires hospitals to develop and implement a security plan for preventing workplace violence and establish a workplace violence incident reporting system.
In Virginia, employers will be prohibited from entering into a noncompete agreement with any employee who earns less than $76,081 annually or is entitled to overtime compensation under the federal Fair Labor Standards Act.
Washington, D.C., will raise its minimum wage to $18.00 per hour. The minimum wage for tipped employees will increase to $12.00 per hour.
Washington State’s paid sick leave law will be expanded to include time off for immigration-related proceedings, starting on July 27, 2025.
In West Virginia, Senate Bill 427 eliminates the requirement that fourteen- and fifteen-year-olds obtain a work permit as a condition of employment. Instead, an employer seeking to hire a teenager must obtain an age certificate verifying the child’s age from the state Division of Labor and the written consent of the child’s parent or guardian.
Next Steps
Employers will need to comply with new laws taking effect in states in which they operate.
Workplace Strategies Watercooler 2025: FMLA Unpacked—Advanced Leave and Compliance Issues [Podcast]
In this installment of our Workplace Strategies Watercooler 2025 podcast series, shareholders Heather Ptasznik (Detroit (Metro)), Dalton Green (Raleigh), and Burt Garland (St. Louis) discuss the most challenging aspects of leave management—with a particular focus on navigating the Family and Medical Leave Act (FMLA). Heather, Dalton, and Burt tackle the most common pain points in leave administration, including what frontline managers should listen for and how HR can proactively manage the process to minimize legal risks. The speakers answer the most common questions on managing the FMLA, covering topics such as what constitutes proper notice, chronic condition certifications, tracking intermittent leave, training for managers, keeping up with regulatory changes, and more.
Supreme Court Decides Against Reinstating Wilcox to NLRB as They Rule on Her Termination – NLRB Remains Without a Quorum
On May 22, 2025, the U.S. Supreme Court ruled National Labor Relations Board (“NLRB”) Member Gwynne Wilcox cannot return to work while she challenges President Donald Trump’s decision to terminate her without cause. The latest decision comes in a long line of court decisions since Trump terminated Wilcox in January 2025. The central issue revolves around 90-year-old precedent Humphrey’s Executor v. U.S., 295 U.S. 602 (1935) limiting the President’s power to fire employees at independent agencies.
The latest Supreme Court order is not a decision on the merits, although it is likely a sign of things to come. The order was split 6-3 along ideological lines, which likely indicates a majority of justices believe Humphrey’s Executor is no longer good law or is distinguishable as it relates to the NLRB. The Supreme Court stated it will hold off on issuing a full decision on the merits until the parties fully brief and argue the central issue. In the meantime, Wilcox remains removed from her position and the NLRB is left without a three-member statutory quorum to hear cases. The Supreme Court stated the stay “reflects our judgment that the government faces greater risk of harm from an order allowing a removed officer to continue exercising the executive power than a wrongfully removed officer faces from being unable to perform her statutory duty.”
We will continue to monitor future developments as the case is heard on the merits. Employers with questions about how the decision affects them should consult experienced labor counsel.
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NLRB Pulls a U-Turn on Remedial Relief in Settlement Agreements: New GC Issues Guidance Encouraging Efforts at Settlement
On May 16, 2025, the National Labor Relations Board’s (“NLRB”) Acting General Counsel, William B. Cowen, issued Memorandum GC 25-06, titled “Seeking Remedial Relief in Settlement Agreements,” that significantly loosens the requirements before NLRB Regions to approve settlements of unfair labor practice charges.
The Memorandum comes on the heels of Cowen’s February 14, 2025, Memorandum GC 25-05 which rescinded dozens of memos issued by his predecessor, former General Counsel Jennifer Abruzzo, including four memos requiring Regions to seek “full remedies” in settlement agreements. Former General Counsel Abruzzo indicated that this “full remedy” could include back pay, front pay, consequential damages “attributable” to the unfair labor practice, limitations on non-admission clauses, and extensive notice postings. For more information on these former settlement priorities, please see our prior blog post.
Acting GC Cowen’s guidance is a sharp departure from prior mandate to seek “full remedies.” GC 25-06 cautions that “if [the Board] attempt[s] to accomplish everything, we risk accomplishing nothing,” and reiterates to Regions that “diligent settlement efforts should be exerted in all…cases.” This is particularly important because, as the memo highlights, since 2019 anywhere from 96% to 100% of unfair labor practice charges were resolved through settlement.
To this end, GC 25-06 provides the following guidance to Regions – and parties – interested in drafting and entering settlement agreements to resolve pending unfair labor practice charges:
Default Language: The Memo limits the need to include default language regarding a parties’ failure to comply with the agreement to only those cases where such language is appropriate, such as when dealing with a recidivist violator, installment arrangement, or liquidated damages.
Non-Admission Clauses: Except for recidivist violators, the Memo expands the ability for the parties to include non-admission of liability clauses in settlement agreements, particularly before a Region has engaged in substantial trial preparation.
Unilateral Settlements: Regions may again use their discretion to approve unilateral settlements – i.e., settlements where the charging party does not consent. Previously, Regions needed to solicit the NLRB Division of Advice’s recommendation prior to approving such settlements.
Make-Whole Relief: While the Memo recognizes that Regions should continue to attempt to secure a full remedy for individuals, Regional Directors now have the discretion to approve settlements that provide for less than 100 percent of the total amount that could be recovered if the Region fully prevailed in litigation. Settlements that provide for less than 80 percent of the “relief reasonably anticipated to be recoverable” after litigation – a standard that is not further defined in the Memo – must be authorized by the NLRB Division of Operations-Management.
Acting GC Cowen also used the Memo to explain his interpretation of the Board’s decision in Thryv, Inc., 372 NLRB No. 22 (2022) (previously discussed here), which expanded the scope of remedies for ULPs by concluding that in all cases where make-whole relief is included as a remedy, the Board will order that “respondent compensate affected employees for all direct and foreseeable pecuniary harms.”
The Memo notes that the Thryv majority opinion did not address what a “direct or foreseeable pecuniary harm” is, expressly disclaiming a comparison to remedies awarded in tort cases. Cowen expressed his reliance on the dissent’s standard that foreseeable harms are those “where the causal link between the loss and the unfair labor practice is sufficiently clear.” Though not binding on the Board in future cases, this narrower formulation helps Regions and parties understand the standard that Regions will likely use to assess if the settlement proposed can be approved under the Acting GC’s new guidance.
Takeaways
This Memo represents an expected about-face from former General Counsel’s Abruzzo prior focus on securing complete make-whole relief in settlement discussions for alleged employer violations of the Act. The Memo takes a far broader view of the importance of seeking settlements in order to permit the NLRB to utilize its limited resources, by loosening the prior requirements that made it more difficult for employers to settle ULP charges.
Although Acting GC Cowen may soon be replaced at the Board as President Trump has nominated Crystal Carey to serve as the next NLRB GC, we expect this policy shift will remain in effect to some degree during the next GC’s tenure.
Finally, it is always important to remember that, unlike NLRB precedent or rulemaking, GC Memoranda—like the one discussed here—do not have the effect of changing the law, and, therefore, the Acting GC’s interpretation of Thryv, Inc. is not binding on the Board or courts. However, the GC Memoranda still provide important insight into the GC’s policy agenda and guidance on the manner in which Regions will review, draft and approve settlements.
We will continue to monitor developments at the NLRB.
Federal Government Announces New Policy on Status Records for International Students
On April 17, 2025, Hunton Immigration and Higher Education attorneys provided a client alert summarizing recent visa revocations and student SEVIS record terminations (e.g., F-1 visa and F-1 student status). This updates the previous client alert, and summarizes important and ongoing changes in federal policy and practices that impact the status of international students studying in the United States. As summarized below, recent developments in a court case related to SEVIS terminations indicate that the federal government, after temporarily reversing some terminations, has revised its criteria for terminating a student’s right to remain in the United States.
First, on April 25, 2025, the U.S. Department of Justice announced in court that the federal government would temporarily restore the previously terminated SEVIS records of thousands of international students. The DOJ read the following statement in court: “ICE is developing a policy that will provide a framework for SEVIS record terminations. Until such a policy is issued, the SEVIS records for plaintiff(s) in this case (and other similarly situated plaintiffs) will remain Active or shall be reactivated if not currently Active . . . .”
This move followed several weeks of lawsuits filed by students and advocacy organizations alleging that the SEVIS record terminations violated the due process and free speech rights of international students, as well as the Administrative Procedures Act. As explained in our prior client alert, international students receive a student visa (e.g., an F-1 visa) to study in the United States. Once they have arrived, they are admitted in F-1 student status and tracked in their SEVIS records through the Department of Homeland Security’s Student and Exchange Visitor Program (SEVP). The termination of SEVIS records led to questions about the students’ legal status in the United States.
With the federal government’s reversal, students whose SEVIS records were terminated should have been restored to active student status. Many institutions saw these changes occur from April 25 through April 27, 2025 in their checks of the SEVIS database and notified their affected international students accordingly.
Three days later, on April 28, what appears to be a draft of the new policy for SEVIS record terminations was provided in a court filing on April 28The message, was dated April 26, 2025 and addressed to all SEVP personnel (the Student and Exchange Visitor Program, run through the Department of Homeland Security), and states that ICE retains the authority to terminate students’ SEVIS records for a broad variety of reasons. The listed reasons included those previously viewed as standard and three significant additions:
Exceeded unemployment time;
Change of status or gap in status; or
S. Department of State visa revocation “effective immediately.”
The message indicates a change to the processes for changing students’ immigration status records in SEVIS and represents a departure from previous policies in several important ways. The message states that evidence of an international student’s failure to comply alone will be the standard used to justify future SEVIS status terminations, rather than the higher standards of “substantial evidence,” “proof,” or the standard required for immigration removal proceedings, “clear and convincing evidence”.
The message also indicated that ICE intends to terminate students’ SEVIS records whenever the Department of State revokes an international student’s visa, followed by initiating removal proceedings. This means that SEVIS records may appear as terminated before a student’s status has been terminated in removal proceedings.
The message did not refer to any change in the federal government’s practice of not notifying students of their SEVIS record terminations. Therefore, an international student may still have their F-1 status terminated in SEVIS without notice to them or their university.
Key Takeaways
International student issues remain a closely-watched topic for higher-education institutions, and we continue to recommend clients collaborate closely with outside legal counsel and their international student offices to keep abreast of the latest legal developments and ensure their ongoing compliance.
In particular, colleges and universities should ensure that they are:
Regularly checking SEVIS to determine if any of their students’ F-1 status has been terminated (or restored to Active) and communicate any developments to the affected students as soon as possible.
Preparing for possible federal immigration enforcement activity on or around campus by understanding the types of requests for information federal agencies might make and best practices to meet cooperation obligations under federal and state law.
Developing and implementing a plan to address student and campus community concerns, as well as any concerns from the local community. In addition to planning for internal and external communications, expect that individual students may file their own lawsuits in court related to federal action taken on their student visa or SEVIS record.
We at Hunton have resources to advise higher education institutions on their particular immigration needs. We have developed training and guidance designed to assist public safety officers and administrators if federal agencies come to campus, and we can provide guidance and assistance in advising international students and scholars offices, HR and administrators on visa revocations and status terminations for students, researchers faculty, and staff.
U.S. District Judge Upholds Federal Preemption Over Minnesota State Drug Testing Law
The U.S. District Court for the District of Minnesota recently sided with a natural gas distribution company in a lawsuit by an employee in a safety-sensitive position who alleged his discharge following a failed random drug test violated the Minnesota Drug and Alcohol Testing in the Workplace Act (DATWA). The court found federal statutes and U.S. Department of Transportation (DOT) drug and alcohol regulations for safety-sensitive positions preempted the state law.
Quick Hits
The U.S. District Court for the District of Minnesota ruled in favor of a natural gas distribution company that discharged an employee who failed a random drug test.
The court found that federal laws, including the Natural Gas Pipeline Safety Act, the Hazardous Liquids Pipeline Safety Act, and DOT drug and alcohol testing regulations preempted DATWA’s employment protections regarding drug testing.
The decision underscores the significance of federal preemption in workplace drug testing, emphasizing the necessity for employers to align their policies with federal regulations when conflicts arise with state laws.
U.S. District Judge Nancy Brasel granted summary judgment for Minnesota Energy Resources Corporation (MERC) in a lawsuit by a discharged employee who alleged the company violated DATWA. The employee, who worked as a gas distribution system designer, alleged the company violated DATWA in part by requiring the employee to submit to a random drug test and failing to provide him with required notices.
However, the court found that it was impossible for the company to comply with both the federal DOT regulations, which require random drug testing and immediate removal after positive results, and Minnesota’s DATWA, which provides employment protections regarding employer drug tests. Thus, the court ruled that the federal regulations preempt DATWA and dismissed the employee’s claims.
Background
The lawsuit was brought by an employee who was discharged after he tested positive for tetrahydrocannabinol, the primary psychoactive compound in marijuana or cannabis, in a random employer drug test.
The company is subject to the DOT regulations for companies transporting hazardous materials, which require employers to maintain a drug and alcohol testing program. The employer maintained a drug and alcohol testing policy that required employees in safety-sensitive positions who perform “covered functions” to submit to random drug testing.
Following his discharge, the employee and his union filed a grievance. An arbitrator determined that the employee was subject to random drug testing under federal law and that the company acted with just cause in discharging him for failing the drug test. The arbitrator did not address whether the employee was in a safety-sensitive position under DATWA or adjudicate any of the DATWA claims.
The employee then filed a lawsuit against the company, alleging he was not supposed to be subject to random testing and that the employer had failed to provide the required notices under DATWA. Specifically, the employee alleged the company violated DATWA by: (1) requiring him to submit to a random drug test, (2) failing to inform him of his rights in writing, (3) failing to offer counseling or rehabilitation before discharging him, and (4) disclosing his positive test result to a federal agency without a confirmatory test.
Federal Preemption
The district court found that the federal DOT regulations expressly preempt the employee’s DATWA claims because complying with both DATWA and the applicable federal regulations would be impossible or impede the execution of federal drug testing procedures.
DATWA includes many employment protections for employees regarding drug testing. The law requires employers to inform employees in writing of their rights to testing and to a confirmatory test, prohibits employers from discharging employees without first providing them with an opportunity to participate in a counseling or rehabilitation program, and restricts the disclosure of a positive test result.
Also, DATWA contains a preemption clause that exempts employees who are subject to drug and alcohol testing under “federal regulations that specifically preempt state regulation of [such] testing with respect to those employees.”
On the other hand, the applicable DOT regulations state that they preempt state or local requirements where compliance with both “is not possible.” The regulations also require mandatory random drug testing for employees in safety-sensitive positions, require immediate removal from such positions upon a positive test result, require the medical review officer (not the employer) to take certain actions, and further outline specific procedures for notifying employees of positive test results.
“DOT regulations expressly preempt DATWA because compliance with both federal regulations and DATWA is either impossible or an obstacle to the accomplishment and execution of DOT requirements,” the court said.
Alternatively, the court further determined that the company had met the burden of showing that the federal regulations preempt DATWA under a theory of conflict preemption for the same reasons.
Next Steps
The court’s decision in favor of the employer highlights the importance of federal preemption in workplace drug testing. Employers must adhere to federal regulations, which can override state laws when there is a conflict. This ruling serves as a critical reminder for employers to ensure their drug testing policies comply with federal standards, particularly for employees in safety-sensitive positions.
Supreme Court Stays Orders Reinstating NLRB, MSPB Members, Pending Appeal
On May 22, 2025, the Supreme Court of the United States accepted the Trump administration’s argument to keep former National Labor Relations Board (NLRB) member Gwynne Wilcox and former Merit Systems Protection Board (MSPB) member Cathy Harris off their respective boards during the pendency of their consolidated legal action alleging that President Donald Trump unlawfully removed them without cause.
Quick Hits
The Supreme Court has granted a stay of orders from the District Court for the District of Columbia enjoining the president’s removal of NLRB member Gwynne Wilcox and MSPB member Cathy Harris pending the disposition of an appeal in the U.S. Court of Appeals for the District of Columbia Circuit.
The stay, which will remain in effect until the Supreme Court rules on the issue, has the effect of preventing the NLRB from having the quorum needed to issue decisions for the foreseeable future.
The Supreme Court granted the government’s emergency application to stay two district court orders that had reinstated Wilcox and Harris as members of the NLRB and MSPB, respectively. The Supreme Court stated that the stay would remain in effect through the appeal in the U.S. Court of Appeals for the District of Columbia Circuit and until the Supreme Court rules on the issue, if a writ of certiorari is timely sought.
“Should certiorari be denied, this stay shall terminate automatically,” the Court stated. “In the event certiorari is granted, the stay shall terminate upon the sending down of the judgment of this Court.”
The stay ruling comes after an en banc decision by the U.S. Court of Appeals for the D.C. Circuit voided a decision by a three-judge D.C. Circuit panel and revived the two district court orders reinstating Wilcox and Harris. The Trump administration then sought emergency relief from the Supreme Court, and Chief Justice John Roberts granted a temporary stay.
By statute, the president is prohibited from removing NRLB and MSPB members except for cause. However, the Trump administration has argued that provisions limiting the president’s removal power are unconstitutional and infringe the president’s authority as the executive.
“The stay reflects our judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power,” the Supreme Court stated. “But we do not ultimately decide in this posture whether the NLRB or MSPB falls within such a recognized exception; that question is better left for resolution after full briefing and argument.
“The stay also reflects our judgment that the Government faces greater risk of harm from an order allowing a removed officer to continue exercising the executive power than a wrongfully removed officer faces from being unable to perform her statutory duty,” the Court stated.
Justice Elena Kagan issued a dissenting opinion, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, arguing the Court should not “overrule or revise existing law” through an expedited emergency application “with little time, scant briefing, and no argument.”
The dissent pointed to the 1935 decision in Humphrey’s Executor v. United States, in which the Supreme Court upheld restrictions on the president’s authority to remove officers of certain types of independent agencies—in that case, a commissioner of the Federal Trade Commission.
A D.C. Circuit panel is currently considering the consolidated action of Wilcox and Harris challenging their removal. The court heard oral arguments in the case on May 16, 2025.
Next Steps
Though not final, the Supreme Court’s ruling backs President Trump’s near-unprecedented removal of members of independent federal agencies without cause. Notably, the Supreme Court’s stay will remain in effect until it decides the issue, as litigation remains ongoing.
In the meantime, the NLRB lacks the quorum required to issue decisions, hampering its ability to revise or reverse some of the employee-friendly decisions issued during the Biden administration. At least until the president appoints, and the U.S. Senate confirms, one or more new Board members, the Supreme Court’s stay seems to ensure that the NLRB will remain without a quorum for the foreseeable future.
Remote Employee Solidifies Manufacturer’s Right to Apportion Income
A plethora of case law, state guidance, and practitioner musings are devoted to discussions of what income of a multistate taxpayer is subject to apportionment and the fairness of various apportionment methods. Much less discussion centers on whether a taxpayer with only one brick-and-mortar location has a right to apportion its income. A recent decision of the Michigan Tax Tribunal addresses this fundamental question. Vidon Plastics Inc v. City of Lapeer, MTT Docket No. 23-002017 (Apr. 17, 2025).
The Facts: Vidon Plastics Inc. (“Vidon”), a Michigan manufacturing corporation, operates its sole manufacturing plant in Lapeer, Michigan. On its Lapeer Corporation Income Tax returns, Vidon reported 100% of its property and payroll as being in Lapeer. However, Vidon reported 0% of its sales to Lapeer because all of its sales of tangible personal property were shipped to customers located outside of the City.
The City rejected Vidon’s apportionment of its sales because Vidon’s only physical location is within the City. Vidon appealed the City’s rejection to the Lapeer Income Tax Board of Review, which agreed with the City’s position. Vidon appealed to the Michigan Tax Tribunal.
The Law: Cities in Michigan are authorized to levy an income tax “on such part of the taxable net profits as is earned by [a] corporation as a result of work done, services rendered and other business activities conducted in the city[.]” A corporation is entitled to apportion net profit outside of a Michigan city where it is located when its entire net profit is “not derived from business activities exclusively within the city.” Though not defined in the law, the Tribunal determined that the term “business activity” warrants a “broad and liberal interpretation” and, thus, includes “the enterprise, profession, or undertaking of any nature conducted or ordinarily conducted for profit or gain by any person.”
In 2018, the Lapeer City Commission approved Regulation 18.1, which provides that a corporation is not entitled to apportion its net profit if it “has no regularly maintained and established out-of-city location and engages in no out-of-city business activity,” even if it fills orders by shipment to out-of-city destinations.
The Decision: Vidon asserted its right to apportion was established by several aspects of its business. Finding the burden rested with Vidon to establish its right to apportion by a preponderance of the evidence, the Tribunal examined each of Vidon’s purported out-of-City activities.
First, the Tribunal concluded that Vidon failed to establish that it conducted business outside of Lapeer via ownership of inventory in Texas. For inventory shipped free-on-board by carrier to the Texas warehouse, the Tribunal found that title transferred from Vidon to its customer when the inventory was given to the carrier because Vidon presented no evidence that title transferred at any other point. For consignment stock, the Tribunal applied provisions of the Uniform Commercial Code to determine that although the parties contracted that title did not pass until the purchaser withdrew inventory from the warehouse, this retention of title by the seller to goods shipped to a buyer merely created a security interest in the property—not the reservation of title in the property by Vidon.
Second, the Tribunal concluded that Vidon’s sale of goods destined outside of the City did not constitute business activity outside of the City. Though the Tribunal noted that such sales would not be counted in the numerator of the Lapeer sales factor for apportionment purposes, the Tribunal concluded that this does not mean that Vidon “conducted business activity outside the [C]ity[.]”
Next, finding that Vidon’s Lapeer-based employees and Vidon’s Illinois-based independent contractor do nothing outside of the City other than solicit orders of tangible personal property, the Tribunal found no evidence that their conduct constitutes business activity outside of the City.[1]
Finally, the Tribunal analyzed the conduct of a Vidon employee who primarily worked from his home in Ann Arbor. Reviewing the nature of the Ann Arbor employee’s activities, the Tribunal found that the employee’s activities included not just sales activities, but “things in addition to sales” including helping with strategic planning. Based on the location and type of work done by the Ann Arbor employee, the Tribunal found that Vidon established its “right to apportion its income.”
The Takeaway: Setting aside any discussions of constitutional law, this case serves as an important reminder that even a business with only one physical location may have a statutory right to apportion its income when the business engages in activities outside of its home jurisdiction. To substantiate its right to apportion, a business should think holistically about its activities—especially those of remote and/or travelling employees. Apportionment is a right—use it, don’t lose it!
[1] The Tribunal relied on MCL 141.605(a) for the proposition that a person is not doing business based on the solicitation of orders outside the City for sales of tangible personal property, which orders are sent inside the City for approval or rejection and, if approved, are filled by shipment or delivery from a point inside the City. This Michigan law seems to parallel Public Law 86-272, a federal law that generally prohibits a jurisdiction from imposing a net income tax where the taxpayer’s activities within the jurisdiction are limited to the solicitation of orders of tangible personal property, activities ancillary to solicitation, or de minimis activity.
A Tie Goes to the Runner, a Common Law Extravaganza, and the Administration Gets a Break – SCOTUS Today
Today, an evenly divided 4–4 U.S. Supreme Court, with Justice Barrett having recused herself, decided in Oklahoma Statewide Charter School Board v. Drummond to leave in place the holding of the Oklahoma Supreme Court blocking an effort in that state to create the nation’s first faith-based charter school.
This tie leaves open the question of whether states with taxpayer-funded charter school programs are constitutionally required to incorporate religious institutions. The one-line per curiam order gives no indication of how the Justices voted in the case, although the Chief Justice’s questioning during the oral argument—noting that governmental oversight of a charter school is a far greater connection to religion than merely appropriating money from which the school benefits—suggests that he joined the three jurisprudential liberals.
Justice Barrett’s recusal is attributed to her friendship with an advisor to the Catholic school at the center of the case, and leaves open the question of whether she would participate in a future case raising the establishment issue. Note that both the Chief Justice and Justice Barrett are practicing Catholics. We have some evidence of what the Chief Justice thinks with respect to the involvement of government in religious schools, but we don’t yet know Justice Barrett’s view.
Kousisis v. United States, on the other hand, was anything but a tie. All the Justices agreed (though Justices Thomas, Gorsuch, and Sotomayor concurred in whole or in part) with the opinion of Justice Barrett that a defendant who induces a victim to enter into a transaction under materially false pretenses may be convicted of federal wire fraud even if the defendant did not seek to cause, and did not cause, economic loss to the victim. Here, the petitioners gained a Pennsylvania public painting contract by falsely representing that they would work with a qualified disadvantaged business. This lie, however, did not cost the Commonwealth of Pennsylvania anything extra. The Supreme Court held that to prove wire fraud, the crime charged, a defendant must be shown to have “engaged in deception and had money or property as an object of his fraud.” However, it doesn’t follow that a federal fraud conviction cannot stand unless the defendant sought to cause the victim net pecuniary loss.
In a tour-de-force analysis of statute, precedent, and, particularly, common law, Justice Barrett explained that, besides the fact that the statute in question does not mention economic loss, the essence of actionable fraudulent-inducement theory is that a victim who might not have suffered any monetary loss is nevertheless injured by getting something other than what he or she has bargained for. In this case, the Commonwealth lost the benefit of achieving its policy aim of the inclusion of disadvantaged businesses. This theory is consistent with the statutory text, the Court’s precedents, and, most of all, a lengthy common law history.
The Barrett majority opinion and Gorsuch concurrence are particularly well written. Both ought to be taught in law schools with respect to the sources of law as well as judicial process and decision-making.
Finally, the Supreme Court has just issued an order with respect to presidential power over the tenure of members of multi-member federal agencies, holding as follows:
The Government has applied for a stay of orders from the District Court for the District of Columbia enjoining the President’s removal of a member of the National Labor Relations Board (NLRB) and a member of the Merit Systems Protection Board (MSPB), respectively. The President is prohibited by statute from removing these officers except for cause, and no qualifying cause was given. See 29 U. S. C. §153(a); 5 U. S. C. §1202(d). The application for stay presented to THE CHIEF JUSTICE and by him referred to the Court is granted. Because the Constitution vests the executive power in the President, see Art. II, §1, cl. 1, he may remove without cause executive officers who exercise that power on his behalf, subject to narrow exceptions recognized by our precedents, see Seila Law LLC v. Consumer Financial Protection Bureau, 591 U. S. 197, 215−218 (2020). The stay reflects our judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power. But we do not ultimately decide in this posture whether the NLRB or MSPB falls within such a recognized exception.”
Not only does this order presage the result with respect to the NLRB and MSPB, but it opens for examination whether the Federal Reserve Board should be treated similarly. The government has argued that the Federal Reserve is an exceptional agency, toward which the president’s power should be limited. The question now is whether the government will stick by this concession.
Getting Too Personal? Illinois Court Says Family Medical History is Genetic Information
On May 15, 2025, a district court in Illinois denied a motion by defendant Hospital Sisters Health System and Saint Francis (HSHS) to dismiss a class action claim brought against the hospital system under the Illinois Genetic Information Privacy Act (GIPA).
GIPA regulates the use, disclosure, and acquisition of genetic information and has adopted the same definition of genetic information as provided in the federal Health Insurance Portability and Accountability Act (HIPAA):
(i) the individual’s genetic tests; (ii) the genetic tests of family members of the individual; (iii) the manifestation of a disease or disorder in family members of such individual; or (iv) any request for, or receipt of, genetic services, or participation in clinical research which includes generic services, by the individual or any family member of the individual.
GIPA prohibits employers from soliciting or requesting genetic testing or genetic information of a person or their family members as a condition of employment. GIPA also prohibits employers from changing the terms, conditions, or privileges of employment or terminating the employment of any person due to a person or their family member’s genetic testing or information.
In this case, the plaintiff filed their complaint in December 2024, which states that the hospital system requires potential employees to submit a pre-employment medical examination that an HSHS employee conducts. This examination allegedly entails job applicants being required to disclose information concerning their family medical histories. The plaintiff alleges that she was a job applicant with HSHS and that she, too, was required to submit a medical examination that asked questions about her family’s medical history. These questions reportedly included inquiries on family history of heart disease, asthma, or psychological conditions in the plaintiff’s family.
In its motion to dismiss filed in February 2025, HSHS argued that the generic family medical history questions included in its medical examination are routine medical questions that do not constitute genetic information as protected by GIPA. The court was unconvinced, holding that “these questions involved[d] a clear report of the manifestation of a disease or disorder in a family which is clearly specified in GIPA through its adaptation of HIPAA’s definitions.” In addition, to support its holding, the court noted that the federal Genetic Information Nondiscrimination Act (GINA), which is also incorporated into GIPA, defines the term “family medical history” as “information about the manifestation of disease or disorder” in family members.
Though GIPA litigation has not yet risen to the level of litigation regarding Illinois’ Biometric Information Privacy Act (BIPA), several courts in 2024 have noted that GIPA should apply broadly. In Taylor v. Union Pacific Railroad Co., No. 23-CV-16404, 2024 WL 3425751, (N.D. Ill. July 16, 2024), the court held that GIPA plaintiffs have lenient standing requirements, concluding that BIPA’s definition of “aggrieved persons” – which encompasses individuals who sustained no actual injury beyond a violation of their rights under the statute – applies to GIPA, as well. In McKnight v. United Airlines, Inc., No. 23-CV-16118, 2024 WL 3426807, at *1 (N.D. Ill. July 16, 2024), the court found that individuals outside of Illinois may nonetheless initiate GIPA litigation if the underlying activity “occurred primarily substantially in Illinois” and that GIPA has a five-year statute of limitations.
Employers with ties to Illinois should note that GIPA may apply to them. Any questions about a job applicant’s family medical history may be considered genetic information under the act—even if these questions are intended to be routine health inquiries—and could give rise to a GIPA claim. Pre-employment exams should be structured carefully to avoid running afoul of GIPA and potential class action risks.
No Credit Where It Isn’t Due: The Importance of Preemption and Inventorship in Patent Law
Mr. Storms, an individual with significant experience with Bitcoin mining, is the founder and sole employee of BearBox LLC. Mr. McNamara and Dr. Cline co-founded Lancium in November 2017 with the intention of co-locating flexible datacenters (e.g., Bitcoin miners) at wind centers to exploit the highly variable power output of windfarms.
Lancium intended to exploit the power output of flexible datacenters by “ramping down” and selling power to the electrical grid when energy prices are high. Conversely, when energy prices were low flexible datacenters would “ramp up.” These concepts were disclosed by Lancium in February 2018 in International Publication No. WO 2019/139632, entitled “Method and System for Dynamic Power Delivery to a Flexible Datacenter Using Unutilized Energy Sources.” This application names McNamara and Cline as inventors, and has a priority date of January 2018.
In 2019, Lancium began to develop internally its own software to control cryptocurrency miners, which it monitored at least one windfarm with by May 2019. Lancium also worked with various companies to design and manufacture portable mining containers.
Around this same time (late 2018 to early 2019) BearBox began to design, build, and test the BearBox system that allowed a remote user to control an individual relay to turn on and off Bitcoin miners. By May 7, 2019, Mr. Storms developed source code that could control a mining site based on various economic conditions, such as the cost of electricity.
On May 3, 2019, Mr. Storms met Lancium for cocktails and dinner at a cryptocurrency conference, where Mr. Storms and Mr. McNamara discussed the Bear Box system. The two exchanged numbers, but never met in person again. On May 8, 2019, after a few exchanged text messages, Mr. McNamara asked Mr. Storms for BearBox design specifications. Mr. Storms responded the by an email with the following attachments: (1) a one-page BearBox Product Specification Sheet; (2) an annotated diagram of BearBox’s Automatic Miner Management System; (3) specification sheets on fans and other hardware components; and (4) a data file modeling a simulation of the BearBox system. Mr. McNamara credibly testified that he spent no more than three minutes reviewing the attachments before considering the price of the BearBox system too high compared to other solicited manufacturers.
On October 28, 2019, Lancium filed U.S. Provisional App. No. 62/927,119 ( the ’119 application), which ultimately issued as the ’433 patent, entitled, “Method and Systems for Adjusting Power Consumption Based on a Fixed-Duration Power Option Agreement.” The ’433 patent relates to a set of computing systems that are configured to perform computational operations using power from a power grid; and a control system that monitors a set of conditions and receives power option data based, in part, on a power option agreement, and McNamara and Cline are the named inventors.
BearBox brought a lawsuit against Lancium asserting, inter alia, claims of sole or joint inventorship of the ’433 patent and conversion under Louisiana state law. Lancium succeeded on summary judgment that federal patent law preempted the conversion claim as pled.
Lancium was denied summary judgment on inventorship, but in the interim, the district court struck a supplemental report from BearBox’s technical expert. The district court determined BearBox had acted in bad faith when it served the report three weeks before the start of trial, and five months after the close of expert discovery, without seeking leave of court or Lancium’s consent, as required by the district court’s scheduling order.
Following a three day bench trial, the district court concluded that BearBox had not met its burden under the inventorship claim by clear and convincing evidence. BearBox appealed the district court decision.
Issues
Did the district court err in holding BearBox’s claim for conversion, under Louisiana state law, as pled is preempted by federal patent law?
Did the district court err in deciding to strike BearBox’s expert’s supplemental report in toto?
Did the district court err in holding that BearBox failed to provide clear and convincing evidence that Mr. Storms should be named a sole or joint inventor?
Holding
No, the district court properly held that federal patent law preempted the state law conversion claim as pled by BearBox.
No, the district court properly excluded BearBox’s expert’s supplemental report.
No, the district court properly held that BearBox failed to provide clear and convincing evidence that Mr. Storms should be named a sole or joint inventor.
Reasoning
Preemption of Conversion Claim
The Federal Circuit reviewed de novo the district court’s grant of summary judgment as is required under the law of the regional circuit, the Third Circuit. However, for the question of whether federal patent law preempts a state law claim Federal Circuit law governs.
While there are three types of preemption: explicit, field, or conflict preemption; only conflict preemption was implicated by BearBox’s claim. Conflict preemption occurs “when a state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” BearBox v. Lancium, 2023-1922, 12 (Fed. Cir. 2025) (quoting Ultra-Precision Mfg., Ltd. v. Ford Motor Co., 411 F.3d 1369, 1377 (Fed. Cir. 2005)). While there are several congressional objectives for federal patent law, “public disclosure and use . . . is the centerpiece of federal patent policy.” BearBox, 23-1922 at 12 (quoting Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 157 (1989)). Thus, any state law that “substantially interferes with the enjoyment of an unpatented utilitarian or design conception which has been freely disclosed by its author to the public” is preempted as contravening the ultimate goal of federal patent law. Id.
Under Louisiana state law, conversion is “an act in derogation of the plaintiff’s possessory rights and any wrongful exercise or assumption of authority over another’s goods, depriving him of the possession, permanently or for an indefinite time.” BearBox, 23-1922 at 13 (quoting Bihm v. Deca Sys., Inc., 226 So. 3d 466, 478 (La. App. 1 Cir. 2017)). A Louisiana conversion cause of action is not necessarily preempted by federal patent law, as a it may cover a range of conduct not implicating federal patent law. Id. at 13. Additionally, BearBox’s claim was not based on acts of patent infringement or a determination of inventorship, but rather on conversion of documents and information. Id. at 13. However, under Federal Circuit law, a preemption analysis is not a “mechanical compar[ison]” of the required elements of the state law claim with the objectives embodied in the federal law. Id. Instead, the analysis is whether the state law as pled “stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.” Id. (quoting Ultra Precision, 411 F.3d at 1378).
Under this analysis the Federal Circuit affirmed the district court’s determination that BearBox’s conversion claim was preempted by federal patent law. BearBox’s claim, as pled, was “essentially an inventorship cause of action and patent infringement cause of action” that sought patent-like protection for ideas that are unprotected under federal law. BearBox, 23-1922, at 14. The Federal Circuit held the conversion claim “reads like a patent infringement cause of action.” BearBox, 23-1922 at 14. Even the damages sought by BearBox for the use, sale, and monetization of the technology it alleged it owns and invented, were patent-like damages. BearBox’s proposed damages were a “repackaged form of a royalty payment,” instead of the proper measure of damages under a Louisiana conversion claim, which is the return of the property or the value of the property at the time of the conversion. BearBox, 23-1922at 15-16.
Furthermore, federal patent law generally precludes a plaintiff from recovering damages from a defendant’s making, using, offering to sell, or selling an “unpatented discovery after the plaintiff makes the discovery available to the public.” BearBox, 23-1922 at 16 (quoting Ultra-Precision, 411 F.3d at 1380). Here, BearBox’s technology was not patented and was freely shared with others. Thus, allowing BearBox’s claim to proceed would potentially allow it to “recover lost profits or a reasonable royalty from its competitor . . . [for] alleged use of technical information that ‘otherwise remain[s] unprotected as a matter of federal law.’” BearBox, at 16-17 (quoting Bonito Boats, 489 U.S. at 156).
Exclusion of Expert Report
BearBox argued the district court’s decision to strike the supplemental expert report in toto was an abuse of discretion for three reasons: (1) the untimely supplemental report was justified; (2) the supplemental report did not offer new opinions; and (3) the district court incorrectly determined the Pennypack factors weighed in favor of exclusion. BearBox, 23-1922 at 17. The Federal Circuit reviewed the district court’s evidentiary rulings for abuse of discretion.
BearBox first asserted that its expert’s supplemental report, although untimely, was justified because Lancium raised a new claim construction dispute for the first time after the close of discovery. BearBox, 23-1922 at 17-18. The Federal Circuit, however, viewed this assertion as a mischaracterization of the record. While the district adopted Lancium’s construction after the close of discovery, the adopted constructions were raised before and were not new to either BearBox or its expert. The Federal Circuit agreed that BearBox should have addressed Lancium’s proposed constructions in its expert reports.
Next, BearBox asserted that the district court erred in concluding its expert’s report offered new opinions. BearBox, 23-1922 at 19-20. The Federal Circuit saw no error in the determination that the opinions in the Supplemental Report were “beyond mere elaboration or clarification.” Id. at 19. Furthermore, the portions of the prior expert reports BearBox pointed to as support for its claim construction did not overcome or otherwise rectify its expert’s “clearly contradictory testimony.” Id.
Lastly, the Federal Circuit took up BearBox’s contention that even if the supplemental report contained new opinions, striking the report was an “extreme sanction, not normally warranted absent a showing of willful deception or flagrant disregard of court orders.” BearBox, 23-1922 at 20 (internal citations omitted). The Federal Circuit reviewed the district court’s Pennypack factor analysis forabuse of discretion in excluding the evidence. BearBox, 23-1922 at 20-21. The Pennypack factors are:
(1) “the prejudice or surprise in fact of the party against whom the excluded witnesses would have testified” or the excluded evidence would have been offered; (2) “the ability of that party to cure the prejudice”; (3) the extent to which allowing such witnesses or evidence would “disrupt the orderly and efficient trial of the case or of other cases in the court”; (4) any “bad faith or willfulness in failing to comply with the court’s order”; and (5) the importance of the excluded evidence.
BearBox, 23-1922 at 20-21 (quoting ZF Meritor, 696 F.3d at 298 (quoting Meyers v. Pennypack Woods Home Ownership Assn., 559 F.2d 894, 904–05 (3d Cir. 1977))).
For factors (1) and (2), the Federal Circuit reiterated that “the supplemental report offered new legal theories and opinions related to BearBox’s alleged conception and communication of the subject matter of the ’433 patent.” BearBox, 23-1922 at 21. Additionally, the new theories, if allowed, would have unfairly prejudiced Lancium because it was months after the close of discovery and only a few weeks before trial. While allowing Lancium’s expert to respondcould have cured some of the prejudice, given the strained schedule and quickly approaching trial, the Federal Circuit agreed that Lancium had “no meaningful opportunity” to sufficiently cure the prejudice. Id.
Similarly, for factor (3), the Federal Circuit saw no error in the conclusion that the risk of prejudice to Lancium was uncurable in light of the strained schedule and quickly approaching trial, and BearBox presented no evidence to demonstrate that the district court’s determination for this factor was erroneous. Id. at 22.
For factor (4), the Federal Circuit pointed to the district court’s scheduling order that stated that “after discovery no other expert reports [would] be permitted without either the consent of all parties or leave of the court.” BearBox, 23-1922 at 22. Since BearBox did not seek either Lancium’s consent or leave from the district court, the Federal Circuit saw no error in the determination that BearBox’s disregard of the scheduling order indicated bad faith and weighed in favor of exclusion of the report. Id.
For factor (5), the Federal Circuit reviewed the district court’s analysis, which it noted was assessed in two different ways. See BearBox, 23-1922 at 22-23. First, the district court compared BearBox’s expert opening and reply reports to the supplemental report at issue, and concluded the supplemental report “went beyond mere elaboration or clarification.” Id. at 22. Alternatively, the district court assumed the supplemental report did not contain new opinions. Id. at 23. Nevertheless, the district court found it could not reasonably conclude that the exclusion of the supplemental report would harm BearBox. Id. Thus, under either analysis the Federal Circuit viewed the district court as doubtful of the supplemental report’s importance and saw no error in either analysis.
The Federal Circuit ultimately determined, noting the considerable discretion of district courts in expert discovery and case management matters, that there was no abuse of discretion in excluding BearBox’s supplemental report.
Inventorship
For inventorship, BearBox did not challenge the district court’s factual findings or credibility determinations, rather it contended that the district court erred by: (1) excluding Mr. Storms’ testimony as hearsay; (2) analyzing individual claim elements (rather than a combination) by comparing them to Mr. Storms’ corroborating documents; and (3) applying the rule of reason by evaluating documents in isolation.
A district court may correct inventorship under 35 U.S.C. § 256 when it determines that an inventor has been erroneously omitted from a patent. BearBox, 23-1922 at 24. Inventorship is determined on a claim-by-claim basis and the issuance of a patent creates a presumption that the named inventors are the true and only inventors. Id. Any party seeking to correct inventorship of a patent must show by clear and convincing evidence that a joint inventor “contributed significantly to the conception . . . or reduction to practice of at least one claim,” and the “contribution” must arise out of some joint behavior of the inventors. Id. at 25 (internal citations omitted). Furthermore, an alleged joint inventor’s testimony is insufficient to establish inventorship and must be corroborated by further evidence. Id.
To determine whether an alleged co-inventor’s testimony has been sufficiently corroborated a rule of reason is applied by the district court. BearBox, 23-1922 at 24 (quoting Blue Gentian, LLC v. Tristar Prod., Inc., 70 F.4th 1351, 1357 (Fed. Cir. 2023)). The rule of reason requires the district court to examine all pertinent evidence to “determine whether the inventor’s [testimony] is credible.” BearBox, 23-1922 at 24 (quoting Blue Gentian, 70 F.4th at 1358). Since inventorship is a question of law based on underlying facts, a district court’s inventorship determination is reviewed de novo and the underlying fact findings are reviewed for clear error. BearBox, 23-1922 at 24-25 (citing In re VerHoef, 888 F.3d 1362, 1365 (Fed. Cir. 2018); and Dana-Farber Cancer Inst., 964 F.3d at 1370 (Fed. Cir. 2020)).
With respect to the ’433 patent, the only information shared by Mr. Storms with Lancium was his May 2019 email containing the four attachments, which the district court held were insufficient to establish that Mr. Storms’ inventorship. As a result, the Federal Circuit affirmed that BearBox had failed to prove by clear and convincing evidence that Mr. Storms had either conceived of, or communicated prior to Lancium’s independent conception, the subject matter of any claim of the ’433. BearBox, 23-1922 at 25.
BearBox also contended that the district court improperly excluded, as hearsay, Mr. Storms’ testimony about statements he made to Mr. McNamara at the May 2019 dinner. The Federal Circuit acknowledged some merit in BearBox’s contention but held that BearBox did not properly preserve its claim of error for appellate review. BearBox, 23-1922 at 27. Specifically, when the district court ruled that Mr. Storms’ testimony was hearsay, BearBox’s counsel made no offer of proof as to what Mr. Storm’s response would have been had he been permitted to answer the question. Id. Therefore, the Federal Circuit could not determine that there was prejudicial error in excluding Mr. Storms’ testimony as hearsay. Id.
BearBox’s next contention was that the district court failed to consider claim elements in combination and only focused on individual elements when it evaluated whether Storms conceived of the claimed inventions. BearBox, 23-1922 at 27-28. The only case BearBox cited in support of this argument that addressed inventorship was Blue Gentian. Id. The Federal Circuit, however, noted that in Blue Gentian it did not adopt a general criticism of limitation-by-limitation analysis. Id. Thus, Blue Gentian could not support a determination that the district court erred in adopting a limitation-by-limitation approach.
Lastly, BearBox contended that the district court erred by “referenc[ing] the Rule of Reason” but “not address[ing] whether, under the Rule of Reason, the totality of the evidence, including circumstantial evidence supports the credibility of the inventors’ story.” BearBox, 23-1922 at 28 (internal quotations omitted). BearBox asserted that two of the district court’s fact findings were inconsistent, and thus, improperly evaluated. First was the finding that “through late 2018 into early 2019, Storms began to design, build, and test a system . . . that allowed a remote user to control individual relays so that miners could be turned on or off.” Id. The alleged conflicting finding was “BearBox did not otherwise proffer evidence establishing that the BearBox System could individually control the system of 272 miners.” Id. The Federal Circuit held the that the later fact finding was taken out of context. For that finding of fact, the district court found, based on a credibility determination regarding competing expert testimony, that Mr. Storms’ “Source Code ‘only ever instructs . . . all the relays of the PDUs to turn on or off.” Id. at 29 (emphasis added). Additionally, the district court found, which BearBox did not mention on appeal, that “even if Storms’ Email did meet [the claim element at issue] of the ’433 patent, the Court finds as a matter of fact that Storms did not communicate [this element] prior to [Lancium’s] independent conception.” BearBox, 23-1922 at 29. Finding the remaining arguments unpersuasive, the Federal Circuit affirmed the district court’s dismissal of the state law conversion claim, exclusion of the supplemental expert report, and denial of the claim that Mr. Storms was either a sole or joint inventor of the ’433 patent.
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How Will the EEOC’s Investigation of Anti-American Bias and Antisemitism Impact Organizations?
The U.S. Equal Employment Opportunity Commission (EEOC) has made numerous changes in 2025 with respect to both personnel and priorities. On January 21, 2025, Acting Chair Andrea Lucas announced that one of the priorities of the EEOC’s compliance, investigations, and litigation is protecting employees from religious bias and harassment, including widespread campus antisemitism. Then, on February 19, 2025, Lucas announced, “The EEOC is putting employers and other covered entities on notice: if you are part of the pipeline contributing to our immigration crisis or abusing our legal immigration system via illegal preferences against American workers, you must stop… The EEOC is here to protect all workers from unlawful national origin discrimination, including American workers.” It is common for the EEOC to announce priorities in its investigations. It is believed by the current administration that the shift in the EEOC’s focus will help deter illegal migration, abuse of legal immigration programs, and anti-American discrimination through increasing enforcement of antidiscrimination laws against employers that prefer non-American workers.
If EEOC nominee Florida Assistant U.S. Attorney Brittany Bull is confirmed by the Senate, the EEOC likely will be able to move forward with enforcement of these new priorities.
EEOC Enforcement Priorities under the New Administration
The EEOC is tasked with administration and enforcement of civil rights laws against workplace discrimination. Pursuant to Title VII of the Civil Rights Act of 1964, as amended, the EEOC is comprised of five commissioners, including a chair, all of whom are political nominees. There must be at least three commissioners to have a quorum.
When President Trump was elected, many of those watching the direction of the EEOC did not believe much would change soon in terms of (1) issuance of new guidance, (2) revocation of formerly issued EEOC guidance, and (3) enforcement priorities because, due to the commissioners’ staggered five-year terms, it was believed that the earliest the EEOC could have a Republican majority would be July 2026.
Things have changed, however, since two Democrat EEOC commissioners were fired in January 2025. This was followed by the April 23, 2025, Executive Order “Restoring Equality of Opportunity and Meritocracy,” which announced that the EEOC would look at all pending investigations and lawsuits, including those under Title VII of the Civil Rights Act of 1964, that rely on the theory of disparate-impact liability and would seek “to eliminate the use of disparate-impact liability.” If current commissioner nominee Brittany Bull is confirmed by the Senate, the EEOC will have a Republican majority and a proverbial “green light” on its new enforcement priorities.
These new enforcement priorities, as set forth (above) by Acting Chair Andrea Lucas, include protecting employees from religious bias and harassment, particularly widespread campus antisemitism, and protecting workers from anti-American harassment and discrimination through a shift in focus of Title VII’s prohibition against national origin discrimination.
Lucas’s promise to hold colleges and universities accountable for rising antisemitism is part of a broader goal of many in government to protect Jewish students and employees from discrimination based on religion. For example, on March 18, 2025, Indiana Senator Jim Banks introduced the No Tax Dollars for Encampments Act, requiring colleges and universities to disclose their policies for responding to demonstrations, riots, and strikes. If enacted, this bill would potentially withhold federal funding from universities that do not adequately disclose or comply with policies for addressing civil disturbances.
In addition, on May 19, 2024, the Department of Justice announced that it will use the False Claims Act to identify and investigate recipients of federal funds that it determines allow antisemitism to thrive and promote Diversity, Equity, and Inclusion (DEI) policies. Indeed, the EEOC’s new priorities also include rooting out what it refers to as DEI-based discrimination. Its updated website describes DEI-based discrimination as occurring when DEI initiatives, policies, programs, or practices involve an employer taking an employment action motivated in whole or in part by an applicant’s or employee’s race, sex, or other protected classification. This focus on DEI extends to the religious discrimination context, as a rising number of employees are claiming that being required to comply with DEI-based initiatives violates their religious beliefs.
Religious Bias and Antisemitism
One such pending case involving claimed religious bias connected with DEI is an amended lawsuit filed in Kansas federal court in January 2025, under the caption Sullivan v. United School District 512 (24-cv-2491). In Sullivan, the plaintiff teacher alleges that her employment at the defendant public school system involved her being required to make statements and teach lessons that violate her religious beliefs. Specifically, in 2021, the plaintiff objected, in writing, to the school district’s required DEI training sessions and incorporation of DEI principles into her lesson plans, stating that they were racist, anti-White, and anti-American. The plaintiff was later disciplined for using a student’s incorrect pronouns and allegedly engaging in gender identity discrimination. In addition to alleging violations of Sullivan’s constitutional rights of free speech and free exercise of religion, the Sullivan complaint alleges that defendants violated Title VII and its prohibition against retaliation against individuals who oppose harassment based on race and/or color. How the pending Sullivan case is decided may have an impact on the outcome of several other similar lawsuits alleging violations of Title VII based on religious discrimination and opposition to DEI practices.
Another recent case involving similar issues is Brown v. Alaska Airlines, which was filed in U.S. District Court, Western District of Washington in 2022 (22-cv-668). In Brown, the two plaintiff flight attendants filed suit against Alaska Airlines, alleging that they were discriminated against because of their Christian religion after their employment was terminated for posting comments on the Alaska Airlines internal website, which the airline deemed violated its antidiscrimination and antiharassment policies.
The Brown lawsuit alleged several violations of Title VII, including religious discrimination/ disparate treatment, failure to accommodate religious beliefs, hostile work environment, and retaliation. The district court in Washington ruled in favor of the defendants, finding that they were protecting other employees from hearing offensive ideas, and that the flight attendants’ comments were not protected by Title VII because not all Christians shared their views and that they merely reflected general ethical principles. The plaintiffs have appealed this decision to the U.S. Court of Appeals for the Ninth Circuit (24-3789), where the case is currently pending. A decision on this appeal may signal how courts will review certain Title VII claims.
In addition to such lawsuits, the EEOC has been involved in seeking information about antisemitism. For example, in April 2025, it was revealed that faculty members of Columbia University and Columbia-affiliated Barnard College received text messages from the EEOC asking them to complete a survey inquiring about whether they are Jewish or Israeli. It was reported that on April 15 Columbia had sent an email to its employees advising it had received a subpoena from the EEOC “in connection with an investigation into alleged harassment of Jewish employees at the University from October 7, 2023, to the present.” It is believed that this EEOC investigation at Columbia is ongoing.
Anti-American Discrimination
As noted above, the EEOC is also shifting the focus of its national origin discrimination enforcement to discrimination against Americans. In February 2025, coinciding with Lucas’s press release regarding protection of workers from anti-American discrimination, the EEOC announced a $1.4 million settlement of a lawsuit alleging national origin discrimination against American workers. EEOC v. LeoPalace Guam Corp. (D. Guam) (25-cv-00004). In that case, the Guam-based hotel LeoPalace Guam Corp. was alleged to have discriminated against non-Japanese employees, including many employees of American national origin, in terms of compensation and terms and conditions of employment. In addition to the monetary relief of more than $1.4 million, the settlement involved injunctive relief including compliance monitoring, training, and reinstatement of former employees.
Potential Concerns Going Forward
Employers should be aware of these new enforcement priorities articulated by the EEOC and be ready to defend against such allegations. While these changes reflect a difference of priority at the federal level, it does not impact prior court precedent on existing state and local laws addressing discrimination. These new enforcement priorities also do not alter the existing case law that private individuals may pursue to address liability under Title VII for organizations. What a new EEOC priority may impact going forward is the number of governmental investigations of organizations on addressing anti-American bias and antisemitism. To aide in this effort, employers should consult with counsel about revising policies and procedures to ensure that requests for religious-based accommodations are carefully evaluated and that all workers are subject to the same employment conditions regardless of national origin.