The Opening Act: Significant Developments in Trump’s First Two Weeks
During the first two weeks in office, President Donald Trump’s administration released many policies impacting employers in areas like immigration, labor, and workplace safety, and reshaping federal regulatory and enforcement policies regarding artificial intelligence (AI) and unlawful employment discrimination and harassment.
Here is a roundup summarizing the key provisions of the executive orders and other policies from the first two weeks of the new administration.
Quick Hits
Changes to immigration policy included stopping entry of refugees and restricting birthright citizenship.
The federal government now recognizes only two genders, male and female. This policy included removing previous guidance that protected LGBTQ workers from discrimination and harassment.
Immigration Policy
On January 20, 2025, President Trump issued an executive order (EO 14160) limiting birthright citizenship. The executive order asserts that children born in the United States on or after February 19, 2025, who do not have at least one lawful permanent resident or U.S. citizen parent, will not have a claim to birthright citizenship.
On January 23, 2025, a federal judge in Seattle, WA, blocked enforcement of this executive order in response to four states (Washington, Illinois, Arizona, and Oregon) seeking a temporary restraining order. Two weeks later, on February 5, a Maryland federal judge issued a nationwide preliminary injunction blocking the executive order in response to a request by five pregnant undocumented women who argued that the order is unconstitutional and violates several federal laws[SF1] .
A different executive order revisits and reviews the United States-Mexico-Canada Agreement (USMCA) and other U.S. trade agreements. The United States’ participation in the UMSCA makes the TN professional work visa available for citizens of Canada and Mexico.
A separate executive order aims to utilize in-depth vetting and screening of all individuals seeking admission to the United States, including obtaining information to confirm any claims made by those individuals and assess public safety threats.
Another executive order suspended the entry of refugees into the United States under the United States Refugee Admissions Program (USRAP). That order took effect on January 27, 2025.
A separate executive order tightens enforcement of border policies. That includes:
detaining undocumented people “apprehended on suspicion of violating federal or state law,” and removing them promptly;
pursuing criminal charges against undocumented people and “those who facilitate their unlawful presence in the United States”;
terminating parole programs for Cubans, Haitians, Nicaraguans, and Venezuelans; and
utilizing advanced vetting techniques to determine familial relationships and biometrics scanning for all individuals encountered or apprehended by the U.S. Department of Homeland Security (DHS).
LGBTQ+ Employees
On January 20, 2025, President Trump issued EO 14168, which states that the federal government recognizes only two genders: male and female. The federal government will no longer use nonbinary gender categories in compliance and enforcement actions.
On January 28, 2025, U.S. Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea R. Lucas rolled back much of the EEOC’s Biden-era guidance on antidiscrimination and antiharassment protections for LGBTQ+ employees.
On January 27, 2025, President Trump removed Democratic EEOC commissioners Charlotte A. Burrows and Jocelyn Samuels and discharged EEOC general counsel Karla Gilbride.
Labor
President Trump also took the unprecedented move of removing National Labor Relations Board (NLRB) Member Gwynne Wilcox, a Democratic appointee whose term was not set to end until August 2028. The president also discharged NLRB general counsel Jennifer Abruzzo before the end of her term and later tapped William Cowen, who was serving as the regional director for the NLRB’s Los Angeles Region Office (Region 21), as the new acting general counsel.
The discharge of the general counsel was expected after former President Biden discharged the general counsel who served during President Trump’s first term, which was upheld in the courts. However, the removal of a sitting NLRB member was surprising and leaves the Board without a quorum to hear cases. Former Member Wilcox has filed a lawsuit challenging her removal, which is likely to lead to a lengthy court case that could ultimately land before the Supreme Court of the United States.
Workplace Safety
The Occupational Safety and Health Administration’s (OSHA) proposed Biden-era rules on “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings” and the “Emergency Response Standard” appear to be on the chopping block following President Trump’s “Regulatory Freeze Pending Review” issued on January 20, 2025. The presidential memorandum directed the agency to refrain from issuing or proposing any new rules until a department or agency head designated by the president has had a chance to approve it.
Higher Education and Title IX
On January 31, 2025, the U.S. Department of Education announced that it would not enforce Title IX of the Education Amendments of 1972 in accordance with a 2024 Biden-era rule that had expanded the definition of “on the basis of sex” to include gender identity, sex stereotypes, sex characteristics, and sexual orientation, and mandated that schools allow students and employees to access facilities, programs, and activities consistent with their self-identified gender.
Instead, the department said it will enforce the protections under the prior 2020 Title IX rule. The change aligns the department with EO 14168 and follows federal court decisions that have vacated or enjoined the 2024 Title IX final rule, finding that it violated the plain text and original meaning of Title IX.
Artificial Intelligence (AI)
President Trump is also reshaping federal policy on artificial intelligence, moving away from the Biden administration’s focus on mitigating potential negative impacts on workers and consumers.
On January 23, 2025, President Trump signed EO 14179, “Removing Barriers to American Leadership in Artificial Intelligence.” The order states, “[i]t is the policy of the United States to sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security.”
The EO came after President Trump, on his first day in office on January 20, 2025, rescinded President Biden’s EO 14110, which was signed in October 2023 and had sought to implement safeguards for the “responsible development and use of AI.”
Next Steps
President Trump’s recent executive orders and other actions over the first two weeks in office have disrupted labor and employment law and created uncertainty for employers, at least in the near term. It remains to be seen what the lasting effects could be, particularly as it appears the administration has more changes in store. However, some of the executive orders and other actions are being challenged, or are expected to be challenged, in the courts, which could answer questions about the constitutional authority of the president and other statutes creating federal agencies. It is unclear what the outcome of the court cases will be.
DOJ and FTC Issue New Antitrust Employment Guidelines In The Last Days of the Biden Administration
On January 16, 2025, three days before President Trump’s inauguration, the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ) jointly issued the Antitrust Guidelines for Business Activities Affecting Workers (the “2025 Guidelines”). The 2025 Guidelines, which do not have the force of law, explain how the agencies assess business practices affecting workers that may violate antitrust laws.
The 2025 Guidelines replace the 2016 Antitrust Guidance for Human Resources Professionals (the “2016 Guidance”). The 2016 Guidance provided principles and specific real-world examples to help HR professionals avoid running afoul of antitrust laws. The new guidelines address a wider range of business practices, including non-compete agreements and restrictions in the independent contractor and franchise settings, providing a non-exhaustive list of practices that may be unlawful:
Wage-fixing and no-poach agreements. Like the 2016 Guidance, the 2025 Guidelines state that agreements between businesses not to recruit, solicit, or hire workers (known as “no-poach” agreements) or to fix wages or terms of employment, may violate antitrust laws and lead to criminal prosecution.
Franchise no-poach agreements. The 2025 Guidelines extend the no-poach prohibition to the franchise context, explaining that agreements in which a franchisor and franchisee agree not to compete for workers may be subject to antitrust scrutiny.
Sharing sensitive information with competitors. The 2025 Guidelines reiterate that sharing information with competitors about terms and conditions of employment may be unlawful if the information exchange has, or is likely to have, an anticompetitive effect. Providing such confidential information through an algorithm or a third party’s tool or product may also be unlawful.
Non-compete agreements. Echoing the Biden-era FTC’s focus on non-compete agreements, the 2025 Guidelines state that non-compete clauses that restrict workers from switching jobs or starting a competing business can violate antitrust laws. The 2016 Guidance specifically declined to take a position on the validity of non-competes. Acknowledging the August 2024 court order setting aside the FTC rule banning most non-compete agreements, the new guidance stresses that the FTC retains the legal authority to address non-competes through case-by-case enforcement actions.
Other restrictive, exclusionary, or predatory employment conditions. In a catch-all category, the 2025 Guidelines provide that other restrictive, exclusionary, or predatory employment conditions, including certain non-disclosure agreements, training repayment obligations, non-solicitation agreements, and exit fee and liquidated damages provisions may violate antitrust laws.
Agreements with independent contractors. Another new principle in the 2025 Guidelines is that antitrust laws apply to agreements that businesses reach with independent contractors. The guidelines specifically cite the growth of app-based businesses that use independent contractors rather than employees to match workers with consumers seeking their services (i.e., gig economy relationships). An agreement between two or more competing platforms to fix the compensation of independent contractors offering their services via the platforms may constitute a per se violation of antitrust laws.
False earnings claims. Finally, the 2025 Guidelines state that the FTC and DOJ may investigate and take action against businesses that make false or misleading claims about potential earnings that workers may realize.
The future of the 2025 Guidelines is uncertain under the new administration. The FTC approved the guidelines by a 3-2 vote, with incoming FTC Commissioner Andrew Ferguson dissenting. In his dissenting statement, Ferguson called the FTC’s replacement of the 2016 Guidance “mere days before they hand over the baton … a senseless waste of Commission resources.” After the Senate confirms the third Republican Commissioner, the FTC may vote to rescind the 2025 Guidelines and either issue new guidance or revert to the 2016 Guidance, which was issued at the end of the Obama administration and remained in place during the first Trump administration.
While the specifics of the new administration’s antitrust policy remain to be seen, employers should review the business practices discussed in the 2025 Guidelines with employment and antitrust counsel to ensure they are appropriately tailored to achieve their purpose while minimizing harm to competition.
False Claims Act Exposure in Focus: President Trump Signs Executive Order Targeting DEI Programs
On January 21, 2025, President Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “EO”), which aims to eliminate diversity, equity, and inclusion (DEI) policies and programs across the federal government and within companies that do business with the federal government.
Importantly, the EO revokes Executive Order 11246, which, since 1965, has mandated affirmative action in employment from government contractors and required implementation of affirmative action programs.[i]
Federal contractors and grant recipients have until April 21, 2025 (90 days from the issuance of the EO) to comply with the EO’s provisions.
Below, we summarize the False Claims Act (FCA) implications of the EO.[ii] Briefly stated, federal contractors and grant recipients, including certain health care organizations, should pay close attention to the EO’s required certifications since they directly tie to potential FCA liability premised on false certification of compliance with the federal anti-discrimination laws.
Key Provisions of the EO
Directs that federal contractors “shall not consider race, color, sex, sexual preference, religion, or national origin in ways that violate the Nation’s civil rights laws.”
Instructs the Director of the Office of Management and Budget to (1) review and revise, as appropriate, all governmentwide processes, directives, and guidance; (2) remove references to DEI and diversity, equity, inclusion, and accessibility (DEIA) from federal acquisition, contracting, grants, and financial assistance procedures; and (3) terminate all “diversity,” “equity,” and analogous mandates, requirements, programs, or activities, as appropriate.
Directs the head of each agency to include “in every contract or grant award” a (1) “term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of [the FCA]” and (2) “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
Instructs the Attorney General, within 120 days of the EO (by May 21, 2025), in consultation with other agency heads, to submit a report containing a “proposed strategic enforcement plan” that outlines, among other things, “the most egregious and discriminatory DEI practitioners in each sector of concern” and “specific steps or measures to deter DEI programs or principles … that constitute illegal discrimination or preferences.”
Pertinent FCA Background
Unlike other federal laws that are enforceable only by the federal government, the FCA is unique in that it also allows private whistleblowers, known as relators, to file qui tam actions on behalf of the government in exchange for a share of the recovery (ranging between 15 and 30 percent of the recovery). The FCA imposes mandatory per-claim statutory penalties that are adjusted annually (currently ranging from $13,946 to $27,894 for each false claim) as well as treble damages.
There are a variety of actionable theories under the FCA beyond the scenario where a company bills the government for products or services that were never provided. One such theory, known as “false certification,” occurs when a party certifies compliance with a required contractual provision, statute, regulation, or governmental program in connection with the submission of a claim.
In false certification cases, noncompliance with applicable legal requirements must be “material” to the government’s payment decision. Materiality is often a contested, focal issue in FCA cases. The U.S. Supreme Court clarified in Universal Health Services, Inc. v. U.S. ex rel. Escobar that the materiality standard is “rigorous” and “demanding” because the FCA is not “a vehicle for punishing garden-variety breaches of contract or regulatory violations.”[iii]
FCA Implications
The mandates set forth in the EO will require a clause in all contracts and grant awards with the federal government where the contractor or grant recipient certifies that it does not have any programs promoting DEI that violate any applicable federal anti-discrimination laws and acknowledges that such compliance is material to the government’s payment decision.
With the new certification and materiality requirements, whistleblowers are likely to be further incentivized to bring FCA actions on the belief that it may be easier to prove a violation. It is unclear how that will play out in the courts. For example, while the EO will require that contracts and grant awards contain a clause stating that compliance with the federal anti-discrimination laws is “material” to the government’s payment decision, that does not end the materiality inquiry. The U.S. Supreme Court in Escobar noted how “the Government’s decision to expressly identify a provision as a condition of payment is relevant, but not automatically dispositive.”[iv]
Additionally, it remains to be seen how uniformly courts will apply the “rigorous” and “demanding” materiality standard in FCA cases predicated on DEI programs while adhering to Escobar’s direction that “the False Claims Act is not a means of imposing treble damages and other penalties for insignificant regulatory or contractual violations.”[v] Indeed, federal contractors, particularly certain health care organizations, that submit many claims to the federal government could face billions of dollars in potential exposure—largely due to the FCA’s per-claim penalties—stemming from a particular program that was indisputably lawful prior to the second Trump administration and unrelated to the nature of the contracted items or services.
While it is not clear precisely which specific DEI/DEIA programs or initiatives would be prohibited, the Trump administration’s position is clear that contractors or grant recipients found to have submitted requests for payment while maintaining unlawful DEI programs could be subject to significant FCA liability.
Best Practices for Mitigating FCA Risk
DEI and DEIA initiatives, including policies, programs, and plans, should be promptly and carefully evaluated to determine whether they may violate federal anti-discrimination laws, as federal contractors and grant recipients will need to certify compliance with those laws. Remedial measures should be promptly implemented, as appropriate, to the extent any initiatives are likely to violate federal anti-discrimination laws.
Companies should monitor agency publications for guidance on which initiatives remain permissible under the EO. Courts are also expected to play an important role in clarifying the reach of the anti-discrimination laws, especially following the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, where it held that “agency interpretations of statutes—like agency interpretations of the Constitution—are not entitled to deference.”[vi] This is especially true here, where the new EO interpretation of DEI activities as unlawful is a radical shift from the Biden administration’s position as expressed in both guidance and regulations.
Documentation of compliance with anti-discrimination laws is essential. Records reflecting policy reviews, trainings, and remedial program changes, as appropriate, will be critical in the event of a government investigation or whistleblower claim.
Because the FCA’s anti-retaliation provisions prohibit adverse employment actions against employees for engaging in protected activity, which could include investigating perceived violations of the FCA stemming from unlawful DEI programs, anti-retaliation compliance protocols and training programs to address this heightened whistleblower risk are recommended.
While the EO is not binding on private-sector organizations that do not contract or do business with the federal government, the EO is still valuable insofar as it shows the Trump administration’s view that various DEI programs and policies may be considered illegal under the anti-discrimination laws.
Private-sector organizations should promptly review any DEI/DEIA plans, programs, and policies, as well as their affirmative action programs, to determine whether they contain any aspects that could be deemed unlawful under Title VII of the Civil Rights Act of 1964 or any other federal, state, or local civil rights law, and consider whether to take any action to modify such plans, programs, or policies, including the names of such plans, programs, or policies.
ENDNOTES
[i] Exec. Order 11246, 3 C.F.R. § 339 (1964–1965).
[ii] Members of our labor and employment team have prepared an employment law-focused analysis of the EO in this blog post.
[iii] See 579 U.S. 176, 194 (2016). More information on materiality and how courts have grappled with Escobar over the years is available in our prior blog post.
[iv] Id. at 178.
[v] Id. at 196.
[vi] See 603 U.S. 369, 392 (2024).
Employment Law This Week – How Will Trump’s Federal Changes Impact Employers? [Podcast, Video]
This week, we examine how the loss of a quorum at the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC), along with the rollback of affirmative action requirements for federal contractors, are creating significant hurdles for employers.
How Will Trump’s Federal Changes Impact Employers?
The regulatory environment for employers is undergoing significant changes. President Trump’s removal of an NLRB member, the NLRB’s general counsel, and two EEOC commissioners has left those agencies without a quorum, delaying decisions and creating uncertainty for employers. Meanwhile, the repeal of Executive Order 11246 has ended affirmative action requirements for federal contractors and grantees.
In this week’s episode, Epstein Becker Green attorneys Erin E. Schaefer and Courtney McFate provide clarity amid these shifts. Employers should prepare for procedural delays from both agencies and reassess their compliance obligations under Title VII of the Civil Rights Act of 1964 and state or municipal contracts in light of reduced affirmative action requirements.
Federal Court Acknowledges Catch-22 Involving FERPA and the NRLA
While union organizing among students flourished under President Biden’s labor board, colleges and universities face unresolved issues, including compliance with other federal laws.[1] In Vanderbilt University v. National Labor Relations Board, Vanderbilt University (Vanderbilt) sought a preliminary injunction enjoining the application of certain National Labor Relations Board (NLRB or Board) regulations that Vanderbilt argued conflict with the Family Educational Rights and Privacy Act (FERPA). The District Court for the Middle District of Tennessee (District Court) granted the injunction, recognizing a conflict between the Board’s disclosure requirements and FERPA’s privacy protections.
FERPA and the NLRB Regulations
The friction between FERPA and NLRB regulations is not surprising. Our last update addressed the NLRB’s General Counsel (GC) memorandum from August 2024, which attempted to reconcile a higher education institution’s disclosure obligations under the National Labor Relations Act (NLRA) and FERPA. In its recent decision, the District Court noted an outright conflict between FERPA and NLRB regulations. Generally, FERPA forbids the disclosure of student information from educational records without written consent unless an exception applies, such as when a student is given timely notice of a subpoena and the opportunity to initiate protective action. Failing to comply with FERPA presents a significant risk—losing federal funding. However, failing to comply with NLRB regulations could result in NLRA violations or preclude an institution from using certain defenses or strategies in a union election proceeding. The District Court recognized that FERPA protects student privacy rights, namely unauthorized disclosures of certain educational records and personal identifying information contained therein, but NLRB regulations enable unions and the Board access to certain personal identifying information for collective bargaining purposes and union elections. The District Court summarized the issue as a “seemingly impossible Morton’s Fork: either comply with those [NLRB] regulations and lose federal funding for violating its students’ privacy; or not comply and face punishment during union election proceedings.”
Vanderbilt University v. National Labor Relations Board
Vanderbilt is a 501(c)(3) FERPA-covered private university that accepts federal funding. The Vanderbilt Graduate Workers Union United, International Union, UAW (Union) filed a representation petition with Region 10 of the NLRB to represent 2,200 graduate student employees. NLRB regulations allow employers, upon filing a petition, to submit a statement of position (SOP), but that SOP must include, among other things, “a list of the full names, work locations, shifts, and job classifications in the proposed unit.” If the SOP omits information, an employer is precluded from raising any issue, offering any evidence, cross-examining witnesses, or presenting any argument related to the omitted information at the hearing concerning the petition. Vanderbilt argued that it had competing obligations—provide student information per the Board regulations or protect against unapproved disclosure and use of student education records under FERPA. After the Regional Director issued a subpoena directing Vanderbilt to provide the NLRB-required information, the university provided affected students an opportunity to object under FERPA. FERPA allows institutions to release protected records with students’ consent or in response to a lawfully issued subpoena, so long as affected students are given timely notice and an opportunity to take protective action. Over 80 students objected to the subpoena. After another subpoena, Vanderbilt again notified affected students, but it received even more objections. Two graduate students filed a request to intervene directly with the Board proceeding and a motion to stay enforcement of the subpoena to provide time to present their objections. The Regional Director later denied Vanderbilt’s motion to postpone the hearing, the SOP, and its response to the subpoena and further denied the students’ request to intervene and the motion to stay. The two students filed an emergency appeal to the Board. At the same time, Vanderbilt sought emergency expedited relief from the Board to avoid disclosing students’ FERPA-protected information before their objections were adjudicated.
Ultimately, Vanderbilt complied with the subpoena, filing its SOP with redacted student information. At the hearing concerning the petition, the Union moved to preclude Vanderbilt from presenting evidence or arguments contesting the appropriateness of the proposed union or any individual’s eligibility because the SOP did not provide full names. Vanderbilt opposed the Union’s motion for preclusion, arguing the redacted information was FERPA-protected. Eventually, at the Regional Director’s instruction, the hearing officer precluded Vanderbilt from offering evidence or argument on the unit’s appropriateness because it did not provide the required information and precluded Vanderbilt from offering proof regarding the evidence it would have presented.
Vanderbilt requested the District Court issue a preliminary injunction enjoining the Board from enforcing three regulations that essentially present a catch-22 when considered alongside FERPA obligations. Namely, the regulations forced a FERPA violation by disclosing protected personally identifiable information, which would penalize Vanderbilt for FERPA compliance by precluding evidence or argument about the unit’s appropriateness.
The Court Finds A Preliminary Injunction Necessary
The Court ultimately found the regulations contrary to FERPA and thus “not in accordance with law” under the Administrative Procedures Act (APA).[2] The Court granted immediate injunctive relief based on the four factors considered for an injunction, detailed below.
1. Vanderbilt had a Strong Likelihood of Success on the Merits
The Court concluded Vanderbilt is likely to succeed on the merits of its claim that the Board is applying the regulations in a manner not in accordance with the law, particularly because the application directly conflicts with Vanderbilt’s FERPA obligations and penalizes it for compliance. The particular requirements of the NLRB regulations and FERPA illustrate Vanderbilt’s conflict.
The three NLRB regulations at issue provide that:
A statement of position must contain “a list of the full names, work locations, shifts, and job classifications of all individuals in the proposed unit[;]”
If a party fails to “timely furnish the lists of employees,” the employer is “precluded from contesting the appropriateness of the proposed unit” and “from contesting the eligibility or inclusion of any individuals at the pre-election hearing, including by presenting evidence or argument, or by cross-examination of witnesses[;]”
Absent extraordinary circumstances, an employer must provide the Regional Director, within two business days after issuance of direction, “a list of the full names, work locations, shifts, job classifications, and contact information (including home addresses, available personal email addresses, and available home and personal cellular “cell” telephone numbers) of all eligible voters.”
At the same time, FERPA provides (absent exception to disclosure under particular circumstances) that:
[n]o funds shall be made available under any applicable program to any educational agency or institution which has a policy or practice of permitting the release of education records (or personally identifiable information contained therein other than directory information . . . ) of students without the written consent of their parents to any individual, agency, or organization[.]
The Court found Vanderbilt likely to succeed in showing FERPA protections apply to student information NLRB regulations require for disclosure and that the university would be forced to enact a “policy or practice” of disclosure during election proceedings. According to the Court, the information required by the regulations to avoid preclusion, including the voter list related to students and maintained by Vanderbilt, constitutes education records or personally identifiable information. The Court concluded the information, such as work locations, shifts, job classifications, and personal email addresses, did not constitute “directory information,” which FERPA permits an institution to disclose.
The Court held that the Board’s application of the regulations to Vanderbilt clearly conflicted with FERPA obligations. The Court noted that even if the Board adequately contested Vanderbilt’s claim under FERPA’s subpoena exception, the argument would likely fail because of the Board’s strict application, i.e., the Board did not give Vanderbilt a significant opportunity to allow students to seek protective action in response to the subpoena before mandating disclosure. The Court also noted that the Board failed to make a meaningful effort to agree on an accommodation to honor Vanderbilt’s concerns, as the GC recommended, or follow any other related guidance to facilitate compliance and consent procedures. The Court noted that Vanderbilt could not comply with FERPA and the regulations as currently written during the election proceeding and that “a valid statute always prevails over a conflicting regulation.” Therefore, the Court concluded Vanderbilt will likely succeed in its APA claim that the regulations are not in accordance with FERPA.
2. Vanderbilt Would Suffer Irreparable Injury
The District Court also found that Vanderbilt would suffer irreparable injury without an injunction. The Court noted Vanderbilt suffered harm from a previous preclusion order and would continue to suffer if forced to participate in election proceedings governed by regulations that required the university to choose between rights in NLRB proceedings and federal obligations. The Court emphasized the threat of Vanderbilt losing federal funding if forced to continue to comply with the election. Accordingly, given the past harm Vanderbilt experienced—which would continue to pervade—and the potential loss of funding, the Court found irreparable injury.
3. The Third and Fourth Factors Proved Neutral
As for the remaining factors—whether issuance would cause substantial harm to the opposing party or others and the public interest—the Court noted its neutrality. On the one hand, the Court acknowledged that Congress gave the NLRB significant power to regulate election proceedings and that an injunction could delay administrative proceedings, cause confusion regarding the proper application of the regulations, and deprive students of the ability to unionize quickly. However, the Court also noted Vanderbilt’s significant likelihood of success on the merits, which strongly indicated that a preliminary injunction would serve the public interest as “there is generally no public interest in the perpetuation of unlawful agency action.” The Court noted that granting relief would likely benefit over 100 students who objected to disclosing FERPA-protected information. While Congress enacted the NLRA and created the NLRB with specific objectives to not be infringed upon, the Court gave great weight to the fact that Congress similarly intended to protect the privacy rights of students under FERPA—students objected under the rights delegated by Congress. Those rights should not need to be set aside for agency expediency.
After balancing those factors and considering the irreparable harm, the Court found the circumstances warranted a preliminary injunction and narrowly tailored the scope by enjoining the Board from applying and enforcing the regulations to Vanderbilt in a way that violates the APA or FERPA. Shortly after the Court’s decision, the Union withdrew its petition.
What’s to Come
As the Courts and the Board navigate these challenges, the very legal foundation for students being able to unionize could face challenges under a Trump labor board. During President Trump’s prior term, the NLRB proposed but later withdrew regulations that would have excluded students at private universities from the NLRA’s definition of an employee. Will a Trump labor board reintroduce those proposed regulations? With the Senate failing to confirm Lauren McFerran to another term, Republican appointees will have a Board majority in early 2025. With precedent established by President Biden, Trump has already removed the General Counsel that President Biden appointed. In light of existing complex issues involving higher education, labor law, and other developments likely to come, colleges and universities should consult with competent legal counsel to stay abreast of these issues and prepare for any potential compliance obligations.
ENDNOTES
1. Aside from the FERPA compliance issues addressed in this article, higher education institutions may face additional issues with students being recognized as employees, including potential conflicts with federal immigration law and the Fair Labor Standards Act. The Third Circuit Court of Appeals addressed possible minimum wage requirements in Johnson v. NCAA, 2024 WL 3367646 (3d Cir. July 11, 2024), and the NLRB’s regional directors have addressed arguments that under federal immigration law, the characterization of a student as an employee has the potential to violate that student’s immigration status. For instance, international students must comply with federal immigration requirements, which can limit pursuit of full-time work in the United States and hours worked for certain visas. Educational institutions often limit international students’ work hours to comply with such requirements. However, with more and more students recognized as workers, these limits may be exceeded unintentionally if an international student is classified as an employee of their higher education institution, placing certain international students’ visa status at risk. Some regional directors have recognized this potential conflict when presented with election petitions, while others have given less weight to this issue—the facts of the particular case and what students are actually doing appear significant to this determination. See Trustees of Dartmouth College v. Service Employees International Union, Local 560, Case 01-RC-325633 (Feb. 5, 2024); Massachusetts Institute of Technology, Case 01-RC-304042 (March 13, 2023).
2. The Court did not address Vanderbilt’s arguments that the regulations are arbitrary and capricious because it found the regulations as applied were not in accordance with the law (i.e., FERPA).
Navigating Joint Employment: A Renewed Push to Implement a More Employer-Friendly Standard
With a Republican-controlled Congress and White House, business lobbyists are seizing the opportunity to push for permanent clarity on the issue of joint employment. The International Franchise Association (IFA) is advocating for legislation that would establish a narrow standard, requiring an employer to have “direct” control over a worker’s terms of employment to be deemed a joint employer.
The Save Local Business Act is at the forefront of this effort. The proposed legislation seeks to define joint employment under both the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA). The law—if enacted—would specify that a company is only considered a joint employer if it exercises “direct, actual, and immediate” control over significant aspects of employment. This approach would reduce liability for parent companies including franchisors of all kinds and gig-economy platforms like rideshare applications.
Historically, the standard for joint employment has fluctuated between presidential administrations, creating regulatory uncertainty for businesses. Under the first Trump administration, the Department of Labor (DOL) and the National Labor Relations Board (NLRB) implemented rules limiting joint employer liability. However, the Biden administration reversed these policies, favoring a broader interpretation that considered indirect or unexercised control as factors for applying the standard. This broader approach was struck down by federal courts in early 2024, leaving the regulatory landscape in limbo.
Business groups argue that the lack of a consistent joint employer standard hinders growth and complicates compliance. The constant shifts in policy make it difficult for businesses to structure their operations and workforce relationships.
The Save Local Business Act represents an attempt to bring stability to this volatile area of labor law. If passed, it would provide companies with a clearer framework and limit their exposure to potential joint employment claims. However, opposition from labor groups and Democratic lawmakers could make its passage difficult. Critics argue that a narrower standard would allow large corporations to avoid responsibility for wage violations and unfair labor practices by subcontractors and franchisees.
For businesses, this ongoing debate underscores the importance of staying informed about employment law developments. As the legal landscape shifts, consulting with experienced employment law counsel is essential to mitigate potential liabilities and ensure compliance with evolving regulations.
Change Is Coming to Spain’s Minimum Wage, Visa Process, and LGBTQ Protections
In recent months, Spain has approved measures to streamline the visa process and better protect LBGTQ employees. It also has proposed raising the minimum wage and shortening the workweek.
Quick Hits
Spanish authorities are preparing to increase the minimum wage and shorten the workweek to 37.5 hours.
Spain’s government approved a measure to simplify the visa process.
Employers must take steps to protect LGBTQ workers from discrimination, harassment, and violence at the workplace.
Shorter Workweek and Higher Minimum Wage
On December 20, 2024, the Ministry of Labour and Social Economy published a draft law to reduce the workweek from 40 hours to 37.5 hours at the same pay rate. Anything above that amount would be considered overtime.
If the law passes Parliament, businesses and trade unions will be expected to comply with it by December 31, 2025. Companies will be required to maintain digital, real-time records of workers’ hours. Spanish law grants employees the right to disconnect, meaning the right to not respond to work-related emails and texts outside of work hours.
The Spanish government also has proposed raising the minimum wage to €1,184 per month in fourteen payments. If approved, this will take effect retroactively from January 1, 2025.
Changes to Visa Process
The Council of Ministers recently approved the new Regulation on Foreigners, which streamlines the process for immigrants to obtain work and residence permits. Initial visas will be valid for one year. Most renewals will last four years. The jobseeker visa, which previously lasted two years, has been reduced to one year.
The regulation will take effect May 20, 2025.
Protections for LGBTQ Workers
Under Royal Decree 1026/2024, employers in Spain with more than fifty employees must take steps to prevent discrimination, harassment, and violence against LGBTQ individuals in the workplace. Employers must provide adequate training on the rights of LGBTQ individuals, and written policies must prohibit discrimination in the workplace with specific references to sexual orientation and gender expression. Access to employee benefits, including paid leave, must occur without discrimination based on sexual orientation or gender expression.
This measure took effect on January 10, 2025. Employers that don’t comply may be fined up to €150,000.
Next Steps
Employers may wish to prepare to pay a higher minimum wage later this year and keep digital records of workers’ hours. If the reduced workweek is approved, some employers may wish to reassess their hiring and scheduling protocols to ensure that staffing levels are adequate. Some employers may face higher labor costs if both of those measures receive approval.
Employers may wish to review their policies, practices, and benefits to ensure they do not discriminate against LGBTQ employees. They may wish to provide additional training on the rights of LGBTQ workers and the workplace protocols for preventing and reporting harassment or violence.
DOJ Effectively Pauses Its Civil Rights Division’s Litigation, Which May Impact IER’s Pursuit of New Claims
The U.S. Department of Justice (DOJ) issued a directive to its Civil Rights Division, freezing all ongoing or new litigation. The specifics of the freeze are not clear; however, it appears to freeze new claims presented to the DOJ’s Immigrant and Employee Rights Section (IER).
Quick Hits
New and ongoing litigation at the DOJ’s Civil Rights Division is essentially frozen indefinitely.
The freeze could have implications for the Immigration and Employee Rights Section, which handles claims of citizenship discrimination.
Hidden among a flurry of executive orders, within the first week of President Trump’s second term of office, the media reports the DOJ issued a freeze memorandum to its Civil Rights Division, which is the arm of the DOJ that enforces federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status, military status, or national origin. The memorandum reportedly freezes any ongoing litigation held over from the Biden administration, and it halts the division’s pursuit of any new cases or settlements. The Civil Rights Division is also tasked with enforcing voting and election laws. Although not confirmed, it is believed the action is aimed at freezing Biden administration’s focus on cases and claims involving discrimination and violence within police forces throughout the country, as well as cutting back on enforcement of existing voting rights laws.
What is unknown at this time is how this freeze will impact IER, whose role is to enforce the Immigration and Nationality Act’s (INA) prohibition on citizenship discrimination in the hiring, recruitment, and termination phases of employment. The INA also prohibits asking for more or different documents during I-9 processing during an employee’s onboarding. Any potential impact this purported memorandum has on IER is merely a consequence—and not a focus—of the freeze. What is also unknown is how this freeze may impact any ongoing litigation currently proceeding before the Office of the Chief Administrative Hearing Officer involving alleged violations of the INA.
President Trump’s pick for attorney general, Pam Bondi, has not yet been confirmed; however, the acting attorney general is James R. McHenry III, who directed the DOJ’s Executive Office for Immigration Review (EOIR) in President Trump’s first administration and served as EOIR’s chief administrative hearing officer in President Biden’s administration.
McHenry’s career has focused on immigration, which lends some insight into this latest freeze. Should Bondi assume the role of attorney general, the focus of the DOJ for the next four years will likely become clearer—particularly as to how it will handle allegations of citizenship discrimination in light of the administration’s heavy focus on immigration. This is an area employers should remain focused on in the next few months, with consideration given to reviewing internal policies and procedures to ensure compliance with the INA’s antidiscrimination provisions.
Next Steps
In the coming months, employers will want to remain focused and consider reviewing internal policies and procedures to ensure compliance with the INA’s antidiscrimination provisions.
Employment Options for Terminating or Suspending Operations in Mexico
Considering the fluidity of the current US/Mexico situation and the potential for the escalation of destabilizing tariffs, we prepared a short summary of available employment options in Mexico for companies to keep in mind as they consider their operations in that country.
Under Mexican labor law, there are primarily three ways for companies to terminate all employment in a non-unionized facility: (i) collective termination of all employment relationships, (ii) collective suspension of all employment relationships, or (iii) mutual termination of individual employment relationships.
Collective termination of employment relationships
Mexican labor law provides the possibility for employers to collectively terminate their employment relationships with employees upon court order, if the employer proves to the Labor Court any one of the following:
Force majeure or acts of God not attributable to the employer, leading, as a necessary, immediate and direct consequence, to the termination of the jobs;
Evident and declared non-profitability of the business;
Exhaustion of the material object of the extracting industry;
Certain cases applicable exclusively to the mining industry; or
Legally declared bankruptcy.
To submit the request for a collective termination, the employer must give notice to the Labor Court of its intentions to terminate all employment relationships and the basis for such determination. The Labor Court will have to serve notice to each one of the employees and a hearing will take place. Once approved, employees will be entitled to a reduced severance, equivalent to three months of integrated salary plus a payment of an amount equivalent to 12 days per year of rendered services, capped at twice the daily minimum wage of the zone, as seniority premium.
Collective suspension of employment relationships
Employment relationships can be suspended under other circumstances, including cases of force majeure or unforeseeable events, lack of raw material, excess production, temporary economic hardship, or lack of funds. As with a collective termination, to carry out this suspension the employer must notify the Labor Court, which will initiate a special procedure to approve or disapprove the suspension after providing notice to all employees.
If the Court authorizes the suspension, it will determine the compensation to be paid to the employees, based on the likely duration of the suspension and the availability of alternative employment. This compensation cannot exceed the equivalent of one-month of the employee’s salary.
Individual termination of employment relationships
More commonly, companies ceasing operation in Mexico seek to terminate each employment relationship individually. Individual terminations on a facility-wide scale do not require prior approval from labor courts, and do not require the employer to demonstrate the cause for termination, but they do require the employer to pay applicable legal severance consisting of:
a. Payment of accrued labor benefits on the date of the termination (i.e. Christmas bonus, vacation, vacation premium);
b. Payment of an amount equivalent to 12 days per year of rendered services, capped at twice the daily minimum wage of the zone, as seniority premium;
c. Payment of an amount equal to 3 months of salary, paid with consolidated salary (consolidated salary is the base salary plus the proportional part of the accrued benefits) as Constitutional Severance; and
d. Payment of an amount equivalent to 20 days of consolidated salary per full year of rendered services.
Mexico has no notice periods, therefore, execution of mutual termination agreements can be made effective as of the moment they are signed.
Each one of these options can be expensive and, in the case of the suspension or termination of the entire workforce, time consuming. It is important to seek experienced counsel and discuss these options in detail, plan ahead, and prepare a strategy that takes into account both the requirements of the law, the specifics of the company and the situation on the ground.
Executive Order 14173: What Federal Contractors Need to Know [Podcast]
In this podcast, shareholders Scott Kelly (Birmingham) and Lauren Hicks (Indianapolis/Atlanta) discuss the implications of President Donald Trump’s Executive Order 14173, which aims to end illegal discrimination and restore merit-based opportunities. Lauren and Scott delve into the executive order’s impact on federal contractors and subcontractors, particularly the revocation of Executive Order 11246, which mandated affirmative action and non-discrimination obligations. They also explore the potential future actions of the Office of Federal Contract Compliance Programs (OFCCP) and the broader ramifications of the executive order.
Big Game, Big Distractions: Navigating Employment Issues During the Super Bowl
A new national holiday? If football fans had their way, the day after the Super Bowl would be declared work-free! Millions of football fans across the United States will be tuning into the Super Bowl on Sunday, February 9, 2025, in what has become an annual national tradition. But with so much attention and excitement for the “Big Game,” employers may face a host of employment issues, from absences on the Monday after to sports betting and other potential workplace distractions.
Quick Hits
Employers may want to proactively address the potential for increased absenteeism on the Monday following the Super Bowl, often called “Super Sick Monday.”
With heightened excitement leading up to the game, employers may want to address the potential for distractions and loss of productivity.
The National Football League’s (NFL) Kansas City Chiefs will play the Philadelphia Eagles in Super Bowl LIX in New Orleans, Louisiana. Surveys show that 75 percent or more of Americans plan to watch the game. Notably, in a 2024 survey of more than 3,000 U.S. residents by Siena College Research Institute (SCRI) and St. Bonaventure University’s Jandoli School of Communication, 50 percent of respondents indicated they support making the Monday following the Super Bowl a paid day off work.
Here are some potential employment issues around the Super Bowl that employers may not want to punt on addressing.
Watching for ‘Super Sick Monday’
The day after the Super Bowl, often referred to as “Super Sick Monday,” is notorious for high absenteeism and tardiness. Employers may want to anticipate this and consider implementing strategies to mitigate its impact. One course of action for employers would be to remind employees of the organization’s attendance and paid time office and sick leave policies. Other employers—particularly those in the Kansas City and Philadelphia areas, where many are expected to be watching and rooting on their hometown teams—may want to consider flexible scheduling or remote work options for the Monday following the game. Additionally, employers in and around the winning city may want to consider similar steps to prepare for potential absences for the typical championship parade.
Addressing Workplace Distractions
In the days leading up to the Super Bowl, employees may be more distracted than usual, discussing game predictions, organizing office pools, or planning game-day parties. While fostering a sense of camaraderie can be beneficial, employers may want to set clear expectations regarding productivity and/or encourage employees to enjoy the festivities during breaks or lunch hours. Some employers may want to organize a fan event, such as encouraging employees to wear clothes supporting their favorite team or a Super Bowl-themed luncheon. Such company-wide events provide employees with an outlet to express their excitement while maintaining productivity and can also be opportunities for employers to boost employee engagement and morale.
Handling Office Pools and Gambling
Office pools, squares, or other wagering games are always popular for the Super Bowl. These activities can foster camaraderie and communication among the workforce and raise concerns for employers. While the legalization of sports betting has spread rapidly in recent years, the practice is legal and operational in only thirty-eight states and Washington, D.C., as some major states, including California, Texas, and Georgia, are still on the sidelines. As such, employers may want to remind employees of their policies on gambling in the workplace. Employers may further want to avoid company-sponsored office pools or wagering games. If they do, employers may need to ensure that they are conducted in a manner that complies with state and federal laws and that participation is voluntary.
Next Steps
The Super Bowl is a time of excitement and celebration, but it can also present challenges for employers. By proactively addressing these issues employers can maximize and maintain employee morale and productivity.
When ICE Knocks: Immigration Enforcement in the New Administration
Introduction
Since President Trump’s inauguration, the administration has underscored its commitment to prioritizing immigration enforcement. This shift includes an increase in U.S. Immigration and Customs Enforcement (“ICE”) raids and the rescission of previous policies that restricted federal immigration authorities from conducting enforcement actions in sensitive locations such as schools, churches, and hospitals. Given the new enforcement landscape, it is crucial for employers to be prepared for potential ICE raids or other immigration audits.
Preparing for an ICE Raid
An ICE raid is an unannounced operation conducted by ICE agents at businesses or homes to apprehend individuals suspected of violating federal immigration law. During a raid, ICE agents may question individuals present and detain or arrest specific persons. However, their authority to search private space is limited without a judicial warrant.
Specifically, ICE agents can enter public areas of a business, such as parking lots or lobbies, without restriction. However, they cannot access nonpublic areas without consent or a valid judicial warrant. In contrast, private spaces, such as a private home or office, are not generally accessible to the public and may even have signage indicating that they are intended to be private.
A judicial warrant, issued by a federal or state court and signed by a judge, specifies the search’s scope and location, which may include a private area. Employees must allow access to areas specified in the warrant but can refuse entry to nonpublic areas beyond the warrant’s authorizing scope.
In contrast, an administrative warrant, which is not issued by a judge, does not authorize ICE agents to enter private spaces without permission. It directs law enforcement to arrest or detain specific individuals suspected of immigration violations but does not impose a legal duty to comply with ICE demands.
If ICE agents present a warrant, company management should request a copy, verify its type and validity, and proceed accordingly. Legal counsel should be contacted immediately if there is any doubt about the warrant or its validity. It is also important not to interfere with ICE officers or impede their investigation in any way, as obstructing an investigation may result in significant criminal and civil sanctions.
To prepare for a potential enforcement action, employees should be trained on how to interact with ICE agents and who to contact if agents arrive. Employees should be counseled on their rights during an enforcement action. Employers should designate a point of contact knowledgeable about employers’ rights and trained to communicate with agents and legal counsel. Nonpublic areas should be clearly marked to delineate private spaces of a business from public areas.
Preparing for an I-9 Audit
With the heightened focus on immigration enforcement, an increase in I-9 audits and compliance investigations is anticipated. Federal law mandates that employers timely complete an I-9 form for each employee to verify employment eligibility. The Immigration Reform and Control Act of 1986 (“IRCA”) prohibits employing individuals unauthorized to work in the U.S. and requires employers to verify identity and employment authorization.
If the federal government initiates an I-9 audit, the employer will receive a notice of inspection (“NOI”) and generally will have three days to produce I-9 forms for review. If ICE determines that certain employees are unauthorized to work, the employer has ten days to provide valid work authorization for the employees, and if the employer is unable to do so the employees will need to be terminated. Affected employees must be notified of the audit findings.
To prepare for a potential I-9 audit, employers should ensure the use of the current Form I-9 and confirm all employees have proper work authorization. Conducting an internal audit with legal counsel can help identify non-compliance issues, allow for corrections to the I-9 forms, and demonstrate good faith if an NOI later is issued, which can help limit civil penalties against the employer. Contact legal counsel immediately upon receiving an I-9 NOI for guidance and compliance.
Conclusion
With the Trump administration’s focus on immigration enforcement, employers must be prepared for potential ICE actions including enforcement raids in their places of business.