Legal Precedents Offer Novel Ways for Federal Employee Whistleblowers to Fight Retaliation
The system of anti-retaliation protections for federal employees who blow the whistle or speak out about their agency’s conduct is infamously weak. Under the Whistleblower Protection Act (WPA) and other laws, federal employees seeking relief for an adverse action taken against them for whistleblowing must rely on the Merit Systems Protection Board (MSPB). This quasi-judicial entity is plagued by delays and threatened by politicization.
However, there are several potentially effective but under-utilized legal precedents that can permit federal employees facing retaliation to obtain relief in federal court and not solely rely on the WPA for relief. These precedents have been established by the U.S. Courts of Appeal for the District of Columbia and Fourth Circuits, and offer novel ways to have cases heard in federal court or otherwise bolster retaliation complaints. By utilizing these methods, federal employees can feel more confident and in control, knowing they have better chances of gaining meaningful relief if they face retaliation for whistleblowing, oppose discrimination, prevent the violation of their privacy, and enforce their rights to engage in outside First Amendment protected speech.
First Amendment Rights for Federal Employees
The landmark 1995 case Sanjour v. EPA upheld the First Amendment rights of federal employees to criticize the government in activities outside their employment. This created a legal precedent that provides a strong shield for federal employees to make First Amendment challenges to agency regulations stifling whistleblowing when made outside of work. The case permits federal employees at the GS-15 level or below (higher level federal workers were not discussed in the decision, as the applicant for relief was at the GS-15 level) to seek pre-enforcement injunctive relief if a rule or regulation (which would include an Executive Order) has an improper chilling effect on First Amendment protected speech of an employee’s outside speaking or writing.
William Sanjour was the branch chief of the Hazardous Waste Management Division within the EPA who challenged rules written by the Federal Office of Government Ethics that restricted EPA workers’ rights to speak to environmental community groups.
Because the EPA had warned Sanjour that his acceptance of a cost reimbursement for travelling to North Carolina to give a speech critical of EPA policies concerning waste incineration was in violation of a regulation and could result in adverse action, Sanjour could challenge the “chilling effect” on speech of the government’s rule. The D.C. Circuit upheld the constitutional challenge to a regulation that had a chilling effect on First Amendment protected speech.
If he had waited until he was subjected to retaliation he would have been required to use the WPA to remedy the adverse action. But because Sanjour was challenging an unconstitutional chilling effect of a government regulation, he could obtain injunctive relief directly in federal court and avoid the long delays and other problems when pursuing a case before the presidentially appointed MSPB.
The key precedent established in Sanjour v. EPA, by the U.S. Court of Appeals for the District of Columbia Circuit, was that the Court could issue a nationwide injunction preventing the implementation of the regulation because of its chilling effect on the First Amendment right of employees to criticize the federal government. The court recognized that federal employee speech to the public on matters of “public concern” was protected under the First Amendment, and served a critical role in alerting the public to vital issues:
“The regulations challenged here throttle a great deal of speech in the name of curbing government employees’ improper enrichment from their public office. Upon careful review, however, we do not think that the government has carried its burden to demonstrate that the regulations advance that interest in a manner justifying the significant burden imposed on First Amendment rights.”
The precedent in Sanjour v. EPA means that federal employees who plan on making public statements (outside speaking or writing on matters of public concern) can seek a federal court injunction preventing future retaliation based on their First Amendment rights, if they have a reasonable basis to believe that their government employer would take adverse action against them if they made the public disclosures or violated the regulation. Significantly, First Amendment protected speech should cover criticisms of government policy. Policy disagreements alone may not even be covered under the WPA.
The Sanjour case covers outside speaking and writing, not workplace activities. It affirms a federal employee’s right to engage in conduct such as TV interviews, writing op-eds, and speaking before public interest groups, even if the speech engaged in is highly critical of the government or their government-employer. However, employees would have to give a disclaimer making sure that the public understood they were speaking in their private capacity, and the employee could not release confidential information.
Mixed Cases Combining Title VII Discrimination with Whistleblower Retaliation
Precedent established by two landmark federal employee whistleblower retaliation cases holds that federal employees may have their WPA retaliation case heard in federal court in instances where it is a “mixed case” that also involves discrimination or retaliation under Title VII of the Civil Rights Act. The scope of retaliation covered under Title VII is broader than the coverage under the WPA, and by combining both claims a federal employee can significantly increase both their procedural and substantive rights.
Specifically, when an employee is a member of a protected class (Title VII covers race, religion, sex, national origin, among other classes) it is often hard to distinguish whether retaliation originates from their membership in a protected class, their filing complaints of retaliation under Title VII, or their filing complaints of retaliation covered by the WPA. There is often significant overlap in these types of cases.
While federal employees’ retaliation cases under the WPA are forced to remain with the MSPB, under the Civil Service Reform Act, discrimination cases (and cases of retaliation based on protected activities or whistleblowing covered under Title VII) may be removed to federal court if the MSPB does not issue a final ruling within 120 days.
Dr. Duane Bonds was a top researcher at the National Institutes of Health on sickle cell disease who blew the whistle on the unauthorized cloning of participants’ cells. Dr. Bonds faced retaliation for blowing the whistle, including sex discrimination, harassment in the workplace, and eventual termination.
In 2011, the United States Court of Appeals for the Fourth Circuit ruled in Bonds v. Leavitt that Dr. Bonds’ retaliation and discrimination complaint must be considered a “mixed case” and heard together. Under the Civil Service Reform Act, the court allowed Dr. Bonds to pursue her mixed discrimination and retaliation case before a federal court, and she was not required to continue to pursue her WPA case before the MSPB.
In its ruling in Bonds v. Leavitt, the Fourth Circuit cited an earlier D.C. Circuit ruling in Ikossi v. Department of Navy, which similarly allowed a female whistleblower to pursue a “mixed case” alleging both retaliation and discrimination in federal court. Kiki Ikossi was retaliated against after filing complaints to the Navy Research Lab HR Office for workplace gender discrimination in the early 2000s.
The Bonds and Ikossi decisions are controlling precedent in both the District of Columbia and Fourth Circuit judicial circuits. Thus, these precedents would be binding of federal courts in the District of Columbia, Maryland, and Virginia.
The precedents in Bonds v. Leavitt and Ikossi v. Department of Navy mean that federal employees who face discrimination in addition to retaliation may combine their complaints and pursue their case in federal court if the MSPB delays a ruling (which is the norm given its backlog of cases). However, the rules permitting a mixed case are complex, and require employees to identify their invocation of that right when filing an initial complaint. By carefully following the complex timing and filing requirements mandated under both the WPA and Title VII an employee can have his or her whistleblower case can be heard in federal court, and avoid many of the problems associated with cases pending before the MSPB.
Privacy Act Rights for Federal Employees
Linda Tripp is most famous for her role in the impeachment of President Clinton. However, her retaliation case established a strong precedent protecting federal employees under the Privacy Act. Tripp successfully challenged the Department of Defense when it illegally released confidential information from her security clearance file.
The illegally released file was an act of retaliation for her role in presidential impeachment proceedings. However, Tripp did not seek relief under the WPA. Instead, she was able to bring a Privacy Act complaint before a federal court. The Privacy Act covers requests for information concerning yourself, and federal employees are covered under the law with the same rights as other non-government employees. The Privacy Act prevents federal agencies from collecting or maintaining information based on an individual’s First Amendment activities, it prevents the improper disclosure of information to various persons, including any personal information a government employee or manager may provide to individuals outside of the federal government.
The Privacy Act requires the federal government to provide applicants access to all government records related to the applicant that are not restricted from access under very specific exemptions. Once obtaining the documents a the requestor can request correction of any inaccurate information, or inclusion into a file of the requestor’s statement as to why the documents are not accurate. It requires agencies to maintain a record of who they share information with. The law prohibits improper leaks of information. Moreover, of particular interest to whistleblowers, the law prohibits the government from maintaining records related to any person’s First Amendment protected activities.
The law provides all persons, including federal employees, the right to file a lawsuit in federal court to obtain access to their files and seek damages for the actual harm caused by any leaks or violations of the law. A court can also order an agency to correct information in government files that are inaccurate and prevent agencies from maintaining information in violation of law. Persons who filed successful Privacy Act complaints are entitled to attorney fees and costs related to their lawsuit.
Thus, the Privacy Act offers numerous potential avenues for a whistleblower to use those provisions to obtain protection, information, and relief. For example, as in the Tripp case, when the federal government leaked information covered under the Privacy Act to discredit her, Tripp successfully pursued a Privacy Act for damages and fees. She could attack the illegal retaliation caused by the leak of information through the Privacy Act, and avoid the many limitations of the WPA.
Conclusion
For decades, attempts to reform the WPA and give federal employees the right to have whistleblower retaliation cases heard in federal courts have stalled. Over the years, however, legal challenges to retaliation that avoid the limits of the WPA have produced strong precedents allowing specific federal employees to pursue cases in federal courts as long as they strictly follow the correct technical procedures required under each of the specific law or Constitutional provision.
Federal employee whistleblowers are essential to rooting out fraud, abuse, and misconduct throughout the government. Leveraging these strong legal precedents, which can supplement remedies offered under the WPA, can offer critical avenues to protect federal employees from retaliation and ensure they receive the proper relief when it occurs.
Useful Resources
Government Webpages:
Overview Of Federal Sector EEO Complaint Process
U.S. Office of Special Counsel
U.S. Merit Systems Protection Board
Privacy Act of 1974
U.S. Department of Education Confirms That It Will Enforce 2020 Title IX Rule
On January 31, 2025, the U.S. Department of Education’s Office for Civil Rights (OCR) issued a “Dear Colleague Letter” (DCL) announcing that it would enforce Title IX of the Education Amendments of 1972 under the provisions of the 2020 Title IX Rule, rather than the recently invalidated 2024 Title IX Final Rule.
The DCL and Executive Order 14168 (“Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”) have significant implications for schools, colleges, universities, and other recipients of federal financial assistance that are subject to Title IX. These institutions will likely need to review and revise their policies, procedures, and practices to ensure compliance with the 2020 Title IX Rule and the executive order and to prepare for potential enforcement action by OCR or the U.S. Department of Justice.
Quick Hits
OCR will enforce Title IX protections under the 2020 Title IX Rule, not the 2024 Title IX Final Rule.
The 2020 Title IX Rule provides procedural protections for complainants and respondents and requires supportive measures.
The 2024 Title IX Final Rule, which was criticized for impermissibly expanding the definition of “sex” to include gender identity and other categories, has been invalidated by federal courts.
OCR’s new course for enforcement aligns with Executive Order 14168. The 2020 Title IX Rule, issued by the first Trump administration in May 2020, defines “sexual harassment,” provides procedural protections for complainants and respondents, requires the provision of supportive measures to complainants, and clarifies school-level reporting processes. The 2024 Title IX Final Rule, issued by the Biden administration in April 2024, 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.
The DCL follows a series of federal court decisions that vacated or enjoined the 2024 Title IX Final Rule, finding that it violated the plain text and original meaning of Title IX, which prohibits discrimination on the basis of sex in federally funded education programs and activities. The most recent decision, issued by the U.S. District Court for the Eastern District of Kentucky on January 9, 2025, stated that the 2024 Title IX Final Rule “turn[ed] Title IX on its head” by allowing males to identify as and thus become women and vice versa, and by requiring schools to treat such claims as valid. The court also noted that “every court presented with a challenge to the [2024 Title IX] Final Rule has indicated that it is unlawful.” On this note, the DCL states that OCR’s enforcement measures will interpret the word “sex” to mean “the objective, immutable characteristic of being born male or female.”
The DCL also aligns with President Trump’s Executive Order 14168, issued on January 20, 2025, after the president was sworn in for his second term of office. The executive order declares that “[i]t is the policy of the United States to recognize two sexes, male and female” that are “not changeable and are grounded in fundamental and incontrovertible reality.” It directs all executive agencies and departments to “enforce all sex-protective laws to promote this reality,” to use “clear and accurate language and policies that recognize women are biologically female, and men are biologically male,” and to refrain from using federal funds to “promote gender ideology,” a concept that the executive order defines as including a “spectrum of genders that are disconnected from one’s sex.”
The executive order also rescinds several previous executive orders, presidential memoranda, and agency guidance documents issued by the Biden administration that addressed sexual orientation and gender identity issues. The order instructs the attorney general to issue guidance to agencies to “correct” what it describes as the “misapplication of the Supreme Court’s decision in Bostock v. Clayton County, Georgia (2020) to sex-based distinctions in agency activities.” (In Bostock, the Supreme Court of the United States held that Title VII of the Civil Rights Act of 1964’s prohibition against unlawful sex discrimination encompassed discrimination based on sexual orientation or gender identity.)
The executive order authorizes agency action to “ensure that intimate spaces [such as prisons, shelters, and bathrooms] designated for women, girls, or females (or for men, boys, or males) are designated by sex and not identity.” It also prohibits the use of federal funds “for any medical procedure, treatment, or drug for the purpose of conforming an inmate’s appearance to that of the opposite sex.”
Next Steps
In light of OCR’s “Dear Colleague Letter” and President Trump’s Executive Order 14168, schools, colleges, universities, and other recipients of federal financial assistance may want to consider:
reviewing and revising their policies, procedures, and practices to ensure compliance with the 2020 Title IX Rule and executive order; and
providing training and education to staff, faculty, and students on the new requirements and changes related to Title IX enforcement.
Beltway Buzz, January 31, 2025
NLRB: President Trump Fires GC Abruzzo, Member Wilcox. With the arrival of the new Trump administration, many labor policy watchers have been wondering when President Donald Trump would take action regarding the National Labor Relations Board (NLRB). Well, this week, President Trump not only fired NLRB General Counsel Jennifer Abruzzo (which was widely anticipated), but he also dismissed Board Member Gwynne Wilcox. The moves leave the Board in a state of legal limbo, as the remaining Board members—Chair Marvin Kaplan, a Republican, and Member David Prouty, a Democrat—do not constitute an operating forum (though routine operations of the Board—such as processing election petitions—will continue). Moreover, filling Abruzzo’s place is Acting General Counsel Jessica Rutter, who is unlikely to make moves to reverse the Board’s controversial decisions that we’ve chronicled at the Buzz. Jennifer G. Betts, Rodolfo R. Agraz, and Zachary V. Zagger have the details.
Administration Offers Federal Employees “Deferred Resignation” Option. The Office of Personnel Management (OPM) this week presented most federal employees with an employment buyout option: (1) stay in their current positions without “full assurance regarding the certainty” of the viability of the position or agency; or (2) resign by February 6, 2025, and “retain all pay and benefits regardless of your daily workload … until September 30, 2025.” Frequently Asked Questions that accompany the directive clarify that employees are not expected to work during the deferred resignation period. The directive comports with the administration’s goals of returning federal employees to in-person work and creating a “[m]ore streamlined and flexible workforce.” While there are many layers to this issue—including potential legal challenges and the roles that union contracts may play—significant federal employee departures could result in administrative disruptions and backlogs at agencies such as the NLRB, U.S. Equal Employment Opportunity Commission (EEOC), U.S. Department of Labor (DOL), and the U.S. Department of Homeland Security (DHS), and may trickle down to employers in the form of delayed agency responses and processing times.
EEOC Commissioners and GC Removed. According to media reports, President Trump has removed EEOC Commissioners Charlotte A. Burrows and Jocelyn Samuels, and also discharged EEOC General Counsel Karla Gilbride. While Gilbride’s removal was expected—President Biden removed Sharon Fast Gustafson in March 2021—the removal of sitting commissioners is unprecedented. Title VII of the Civil Rights Act of 1964 creates staggered five-year terms for EEOC commissioners, but it does not establish a process for removal. Samuels’s and Burrows’s terms were set to expire in mid-2026 and 2028, respectively, which would have assured Democratic control of the Commission for one and a half years into President Trump’s administration. Now only Kalpana Kotagal, a Democrat, and Acting Chair Andrea Lucas, a Republican, remain on the Commission, leaving it without a functioning quorum (day-to-day enforcement and litigation activities will continue even in the absence of a quorum). President Trump now has the opportunity to establish a Republican majority on the Commission, pending potential legal challenges to the removal of Samuels and Burrows. Nonnie L. Shivers, Tiffany Stacy, and Zachary V. Zagger have the details.
EEOC Acting Chair Sets Forth Priorities. On January 28, 2025, EEOC Acting Chair Andrea Lucas issued a press release, titled, “Removing Gender Ideology and Restoring the EEOC’s Role of Protecting Women in the Workplace,” in which she outlined the steps the Commission would take to implement President Trump’s Executive Order 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” According to the release, Acting Chair Lucas has, among other actions:
“Announced that one of her priorities—for compliance, investigations, and litigation—is to defend the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work.”
“Ended the use of the ‘X’ gender marker during the intake process for filing a charge of discrimination.”
“Commenced review of the content of EEOC’s ‘Know Your Rights’ poster, which all covered employers are required by law to post in their workplaces.”
“Removed materials promoting gender ideology on the Commission’s internal and external websites and documents, including webpages, statements, social media platforms, forms, trainings, and others.”
Importantly, Acting Chair Lucas acknowledges that she lacks the authority to amend or withdraw the Commission’s guidance on harassment in the workplace, despite instructions to do so in the executive order, and even though she believes the guidance is “fundamentally flawed.” An affirmative majority vote by the Commission would be necessary for such an action, as it would to amend the Commission’s regulations implementing the Pregnant Workers Fairness Act. Nonnie L. Shivers and Zachary V. Zagger have the details.
BLS: Union Membership Decline Continues. This week the Bureau of Labor Statistics (BLS) released its 2024 data regarding union membership rates. Overall, the percentage of workers who were members of labor unions dipped ever so slightly to 9.9 percent (it was 10 percent in 2023). Similarly, the private-sector unionization rate decreased from 6 percent in 2023 to 5.9 percent in 2024. Thus, even with President Biden’s “whole of government” approach to promoting unionization and myriad decisions from the NLRB benefiting labor unions, the overwhelming majority of workers prefer union-free workplaces.
Fred Korematsu and a “Morally Repugnant” Executive Order. Civil rights icon Fred Korematsu was born in Oakland, California, on January 30, 1919. In 1942, at the age of 23, Korematsu was arrested and convicted for refusing to be forcibly relocated to a military internment camp following President Franklin D. Roosevelt’s issuance of Executive Order 9066, which authorized the internment of Japanese Americans during World War II. Korematsu appealed his conviction, arguing that the executive order violated the Fifth Amendment of the U.S. Constitution. In 1944, the Supreme Court of the United States upheld his conviction, writing:
Korematsu was not excluded from the Military Area because of hostility to him or his race. He was excluded because we are at war with the Japanese Empire, because the properly constituted military authorities feared an invasion of our West Coast and felt constrained to take proper security measures, because they decided that the military urgency of the situation demanded that all citizens of Japanese ancestry be segregated from the West Coast temporarily.
In the decades following Korematsu’s 1944 release from the Central Utah War Relocation Center in Topaz, Utah, the U.S. government took steps to right the wrongs of the executive order. For example, in 1976, President Gerald Ford rescinded the order, and in 1983, Korematsu’s conviction was vacated. President Bill Clinton awarded Korematsu the Presidential Medal of Freedom in 1998. But the Supreme Court’s odious decision in Korematsu v. United States wasn’t formally overruled until 2018 in Trump v. Hawaii, where Chief Justice John Roberts—referring to the order as “morally repugnant”—wrote:
The dissent’s reference to Korematsu, however, affords this Court the opportunity to make express what is already obvious: Korematsu was gravely wrong the day it was decided, has been overruled in the court of history, and—to be clear—“has no place in law under the Constitution.”
What DHS’ Vacatur of Venezuelan TPS Means for Employers
DHS Secretary Kristi Noem announced on Jan. 29, 2025, that she is vacating former DHS Secretary Alejandro Mayorkas’ Jan. 17, 2025, redesignation of Temporary Protected Status (TPS) for Venezuela for an additional 18 months. This announcement impacts approximately 600,000 Venezuelans currently in the United States with TPS.
Former Secretary Mayorkas designated Venezuela for TPS once on May 9, 2021, and a second time on Oct. 3, 2023. Under Secretary Mayorkas’ Jan. 17, 2025, notice, TPS was extended as follows:
The 2021 designation expires Sept. 10, 2025. Employment authorization documents for individuals who registered under the 2021 designation expire April 2, 2026.
The 2023 designation expires Oct. 2, 2026. Employment authorization documents for individuals who registered under the 2023 designation expire April 2, 2026.
2021 registrants were permitted to register under the 2023 designation. Secretary Noem’s announcement intends to vacate the Jan. 17, 2025, notice. Following Secretary Noem’s announcement, any 2021 registrants who registered under the 2023 designation will have their 2021 designations restored.
As TPS redesignations or extensions must be made at least 60 days prior to the expiration date, Secretary Noem must decide whether to extend the 2023 designation no later than Feb. 1, 2025, and the 2021 designation no later than July 12, 2025. If no decisions are issued by these deadlines, the designation expirations will revert to those in place prior to Former Secretary Mayorkas’ Jan 17, 2025 redesignation of TPS – April 2, 2025 for the 2023 designation and September 10, 2025 for the 2021 designation. There will be an automatic, final six-month extension of each designation.
As a result of this announcement, USCIS will no longer accept Venezuela TPS re-registration applications (Form I-821) and Applications for Employment Authorization (Form I-765) filed under former Secretary Mayorkas’ Jan. 17, 2025, redesignation. USCIS will cease processing applications already submitted and return associated filing fees. Additionally, USCIS will invalidate Venezuela TPS work authorization documents, approval notices, and I-94 forms issued with Oct. 2, 2026, expiration dates.
Employees with Venezuela TPS may be work-authorized pursuant to facially valid work authorization documents or auto-extensions. Employee work authorizations should be evaluated on a case-by-case basis. Jackson Lewis attorneys are available to assist with these evaluations.
The Changing Landscape of AI: Federal Guidance for Employers Reverses Course With New Administration
In the midst of the multiple executive orders issued in the first days of the Trump administration, on 23 January 2025, the White House issued an executive order entitled Removing Barriers to American Leadership in Artificial Intelligence (AI EO). At a high-level, President Trump issued the AI EO to (1) implement the revocation of President Biden’s executive order on artificial intelligence (AI), entitled the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (EO 14110) and (2) create President Trump’s AI action plan to ensure that AI systems are “free from ideological bias or engineered social agendas.” As a result of the AI EO, the Equal Employment Opportunity Commission (EEOC) and Department of Labor (DOL) pulled or updated a number of AI-related publications and other documents from their websites. This alert provides an overview of the AI EO as well as the changes to guidance from the EEOC and DOL. It also outlines best practices for employers to ensure compliance at both the federal and state levels.
Revocation of President Biden’s EO 14110
Similar to the White House’s executive order entitled Protecting Civil Rights and Expanding Individual Opportunity (DEI EO)1 issued on 21 January 2025, the AI EO implemented the revocation of an executive order on the same subject issued during the Biden administration, EO 14110. EO 14110 required the implementation of safeguards (i) for the development of AI and (ii) to ensure AI policies were consistent with the advancement of “equity and civil rights.” EO 14110 also directed agencies to develop plans, policies, and guidance on AI, which they did before the end of 2024.
In connection with rescinding EO 14110, the White House issued a fact sheet and asserted that EO 14110 “hinder[ed] AI innovation and impose[d] onerous and unnecessary government control over the development of AI”. It directed executive departments and agencies to revise or rescind all actions, including policies, directives, regulations, and orders, taken under EO 14110 that are inconsistent with the AI EO. Further, the AI EO mandates that the director of the Office of Management and Budget (OMB) revise OMB Memoranda M-24-10 and M-24-18 (which address the federal government’s acquisition and governance of AI) within 60 days. To the extent that an action cannot be immediately suspended, revised, or rescinded, then the AI EO authorizes agencies to allow exemptions until the actions may be suspended, revised, or rescinded.
AI Action Plan
As part of its stated goal to “enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security,” the AI EO directs the assistant to the president for science and technology, the special advisor for AI and crypto, and the assistant to the president for national security affairs to develop an AI action plan within 180 days. Such AI action plan will be developed in coordination with the assistant to the president for economic policy, the assistant to the president for domestic policy, the director of the OMB, and any relevant heads of executive departments and agencies.
Updates to Existing Federal Agency Guidance on AI
Dovetailing with the AI EO, on 27 January 2025, the EEOC removed AI-related guidance2 from its website. This guidance, published in May 2023, addressed how existing federal anti-discrimination law may apply to employers’ use of AI when hiring, firing, or promoting employees.
Similarly, the DOL noted on its website that the “AI & Inclusive Hiring Framework”3 published in September 2024 by the Partnership on Employment & Accessible Technology, and the DOL’s October 2024 “Artificial Intelligence Best Practices”4 guidance may now be outdated or not reflective of current policies. Both publications are also unavailable in certain locations in which they were previously accessible.While the DOL and the EEOC updated and removed their AI-related guidance respectively, the Office of Federal Contract Compliance (OFCCP) website still maintains its 29 April 2024 nonbinding guidance on how federal contractors and subcontractors should use AI to ensure compliance with existing equal employment opportunity obligations under federal law.5
Best Practices for Employers
As with any change to executive branch and federal agency guidance, employers should continue to monitor developments that may impact AI-related policies. Further, employers should review current AI policies for compliance with the recent executive branch equal employment guidance related to diversity, equity, and inclusion.6 While guidance and enforcement priorities at the federal level have changed, employers must still comply with the various state-level regulations on AI, as many states have passed regulations addressing the use of AI in employment decisions.7 For example, in 2019, Illinois enacted the Artificial Intelligence Video Interview Act, whereby employers who use AI to analyze video interviews must provide notice to the candidate, obtain their consent, and provide an explanation of the AI technology used. Illinois also amended the Illinois Human Rights Act8 to prohibit discrimination by employers who utilize AI in recruitment, hiring, promotion, professional development, and other employment decisions. More recently, in 2024, Colorado enacted a law in 2024 that prohibits algorithmic discrimination in “consequential decisions,” which is defined to include those related to employment or employment opportunity.9 Moreover, with this shift in guidance at the federal level, employers should anticipate increased state and local regulation of AI in employment.10
Conclusion
There are likely to be many more developments in the coming days and weeks. Our Labor, Employment, and Workplace Safety practice regularly counsels clients on the issues discussed above and is well-positioned to provide guidance and assistance to clients on these significant developments.
Footnotes
1 See K&L Gates LLP Legal Alert, Uncharted Waters: Employers Brace for Significant and Unprecedented Changes to Employment Law Enforcement Under New Administration, January 24, 2025, https://www.klgates.com/Uncharted-Waters-Employers-Brace-for-Significant-and-Unprecedented-Changes-to-Employment-Law-Enforcement-Under-New-Administration-1-24-2025.
2 See K&L Gates Legal Alert, Employer Use of Artificial Intelligence to Avoid Adverse Impact Liability Under Title VII, May 31, 2023, https://www.klgates.com/EEOC-Issues-Nonbinding-Guidance-on-Permissible-Employer-Use-of-Artificial-Intelligence-to-Avoid-Adverse-Impact-Liability-Under-Title-VII-5-31-2023.
3 See K&L Gates Legal Alert, DOL’s AI Hiring Framework Offers Employers Helpful Guidance on Combatting Algorithmic Bias, November 12, 2024, https://www.klgates.com/DOLs-AI-Hiring-Framework-Offers-Employers-Helpful-Guidance-on-Combatting-Algorithmic-Bias-11-12-2024.
4 See K&L Gates Legal Alert, The DOL Publishes Best Practices That Employers Can Follow to Decrease the Legal Risks Associated With Using AI in Employment Decisions, December 16, 2024, https://www.klgates.com/The-DOL-Publishes-Best-Practices-That-Employers-Can-Follow-to-Decrease-the-Legal-Risks-Associated-With-Using-AI-in-Employment-Decisions.
5 See K&L Gates Legal Alert, OFCCP Guidance Expands Federal Scrutiny of Artificial Intelligence Use by Employers, July 16, 2024, https://www.klgates.com/OFCCP-Guidance-Expands-Federal-Scrutiny-of-Artificial-Intelligence-Use-by-Employers-7-16-2024.
6 Supra note 1…
7 820 ILCS 42/1.
8 775 ILCS 5/2-101-102.
9 Col. Rev. Stat. 6-1-1701-1707.
10 See K&L Gates Legal Alert, The Texas Responsible AI Governance Act and Its Potential Impact on Employers, January 13, 2025, https://www.klgates.com/The-Texas-Responsible-AI-Governance-Act-and-Its-Potential-Impact-on-Employers-1-13-2025.
Amending New York’s Donnelly Act: If at First You Don’t Succeed, Try, Try, and Try Again
A proposed amendment to New York’s Donnelly Act, introduced earlier this month, would significantly broaden the scope of the antitrust statute enacted in 1899. New York Senate Bill 335, titled the “Twenty-First Century Anti-Trust Act” seeks to modernize the State’s antitrust laws to address “New York’s great concern with the growing accumulation of power in the hands of dominant corporations that undermines the power of workers, consumers, and small businesses.” If passed, it would be one of, if not the most, aggressive set of state antitrust laws to date, and arguably more akin to antitrust jurisprudence in the European Union than the United States under the Sherman Act.
Yet it is not the first (or even second) attempt by the New York Senate to be an antitrust trailblazer. Indeed, substantially similar versions of the bill have been introduced in the New York Senate since at least the 2019-2020 Legislative Session. State Senator Michael Gianaris (of the 12th Senate District), together with other democrats, have introduced some version of this bill each year, and each year, it has passed the State Senate but failed to come up for a vote in the Assembly before the end of each session.[1] It is currently before the Senate Consumer Affairs and Protection Committee and proposes the following additions to the Donnelly Act.
Single-firm conduct and the “abuse of dominance” standard. For the past 125 years, the Donnelly Act has prohibited coordinated conduct or agreements between two or more parties to unreasonably restrain trade; it did not reach unilateral, single-firm conduct. SB 335 seeks to change that, not only by including a state law equivalent to Section 2 of the Sherman Act, but going beyond Section 2’s ban on monopolization (and attempted monopolization) to also address “abuse of dominance.”
Abuse of dominance, a standard applied for many years by the European Union in its competition laws, makes it unlawful for any single corporation or entity with a “dominant position” in a relevant market to “abuse” that dominant position. For example, leveraging a dominant position in one market to limit competition in a separate market, refusing to deal, requiring exclusive dealing, or tying two separate products may constitute “abuse of dominance” under SB 335 if that entity’s market share exceeds 40% as a seller or 30% as a buyer. The bill also expressly prohibits abuse of dominance in labor markets, including restraints on workers’ mobility, freedom to disclose wage and benefit information, and wage discrimination based on undisclosed considerations.
Premerger notification and labor considerations. SB 335 also seeks to put in place the most comprehensive premerger notification program of any US state. Specifically, any transaction by a person doing business in the State which is reportable under the Hart-Scott-Rondino Antitrust Improvements (HSR) Act to federal antitrust agencies must simultaneously be submitted for review by the State attorney general.[2] SB 335 also requires the attorney general to consider each transaction’s effect on labor markets and workers, a consideration also expressly incorporated for the first time in the Department of Justice (DOJ) and Federal Trade Commission’s (FTC) most recent 2023 Merger Guidelines.
Expert witness fees. Finally, SB 335 encourages private and public enforcement of the Donnelly Act by allowing prevailing plaintiffs to recover expert witness fees and costs, a substantial portion of the high cost of litigating most antitrust claims.
* * *
It will be interesting to see if SB 335 progresses any further than prior iterations to become state law (or even come up for vote in the Assembly), particularly now with President Trump’s agenda guiding federal antitrust enforcement priorities. Stay tuned here while we monitor developments on SB 335.
FOOTNOTES
[1] E.g., Senate Bill 8700 (2019-2020 Legislative Session), available at NY S08700 | 2019-2020 | General Assembly | LegiScan; Senate Bill 6748 (2023-2024 Legislative Session), available at NY S06748 | 2023-2024 | General Assembly | LegiScan.
[2] Since August 2023, healthcare transactions affecting New York must be reported to the State’s Department of Health under existing laws, N.Y. Pub. Health Law § 4550 et seq., but SB 335 seeks to reach all qualifying transactions, not just in healthcare.
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Massachusetts Pay Transparency Law: FAQs & February Deadline
The Commonwealth of Massachusetts Executive Office of Labor and Workforce Development recently published FAQs that provide guidance on the Commonwealth’s new Salary Range Transparency Act (“the Act”). The Act requires employers with 100 or more employees at any time during the prior calendar year to submit their Equal Employment Opportunity (“EEO”)-1 reports to the Commonwealth by February 1 of each year. The FAQs include information for employers on their reporting requirements under the Act. Individual data will not be made public; only aggregated data will be published.
Key Takeaways and Clarifications from the FAQs:
Employers need not create new reports or make changes to their existing EEO-1 report. Employers may “file the same copy of the EEO report you filed with the Equal Employment Opportunity Commission (“EEOC”).” Employers have the option, however, to customize a report reflecting the required data for only Massachusetts-based employees.
Employers are not required to submit W-2 income earnings data by race/ethnicity, sex, and job category to the Commonwealth, since pay data is not part of the current EEOC reporting requirements.
The initial EEO-1 report is due by February 1, 2025, and annually on the same date thereafter. Since February 1 falls on a Saturday this year, reports will be accepted until Monday, February 3, 2025. The other EEO reports are due by the same deadline but on a biennial basis: EEO-3 and EEO-5 this year (2025), and EEO-4 next year (2026).
Employers must submit the report in PDF, JPG, or PNG format to the Secretary of State’s office through the web portal. The web portal for filing the EEO-1 reports is live, and can be accessed here.
In addition to the February deadline for wage data reporting, the Act also requires Massachusetts employers to disclose salary ranges for most employment postings by October 29, 2025. We expect the Commonwealth to release additional guidance for employers on the pay disclosure requirements. In the meantime, more general information on the upcoming requirements can be found in our recent Workplace blog post: Massachusetts Governor Signs Pay Transparency Law – Blank Rome Workplace.
Compliance Efforts with Trump EOs Begin in the EEOC
On Tuesday, January 28, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) issued a statement titled “Removing Gender Ideology and Restoring the EEOC’s Role of Protecting Women in the Workplace,” marking a shift to align with the Trump administration’s Executive Order 14166 issued last week. The EEOC’s Acting Chair, Andrea Lucas, announced a renewed focus on protecting women from sexual harassment and sex-based discrimination in the workplace. According to Lucas, this shift involves rolling back certain policies from the Biden administration that focus on gender identity, emphasizing the protection of sex-based rights and the biological distinctions between men and women.
Executive Order 14166 called for federal agencies to uphold laws that protect men and women as biologically distinct sexes. It directed federal agencies to remove any policies, statements, or communications promoting gender ideology and sought to reinforce sex-based rights and accommodations, including safeguarding women’s access to single-sex spaces like bathrooms and locker rooms.
As part of her agenda, Acting Chair Lucas has taken several actions:
Prioritizing Sex-Based Rights: Lucas has made it a priority for the EEOC to defend the biological and binary nature of sex in investigations, litigation, and compliance efforts.
Revising Policies: The EEOC removed its “pronoun app” from Microsoft 365 profiles, ended the use of “X” gender marker on discrimination charge forms, and eliminated the “Mx.” prefix option from forms.
Reviewing Materials for Compliance: The agency has started revising its “Know Your Rights” poster and is in the process of removing what it considers gender ideology-related content from internal and external materials.
Certain changes require a majority vote of the Commission, meaning that Acting Chair Lucas cannot unilaterally change some documents, like the 2024 Commission’s Enforcement Guidance on Harassment in the Workplace. However, Acting Chair Lucas has expressed strong opposition to aspects of the Guidance that promote gender identity-based claims, particularly concerning access to sex-segregated facilities and the use of pronouns. She argues that it is not harassment to maintain distinctions between the sexes in certain workplace settings, such as bathrooms or locker rooms, and that doing so is essential for protecting women’s safety and privacy.
Illinois Ruling on Civil Liability for Employers Confirms Risks to Companies
Since their inception, the Illinois Workers’ Compensation Act (820 ILCS 305/1 et seq.) and Workers’ Occupational Diseases Acts (820 ILCS 310/1 et seq.) (the “Acts” or “Act”) have offered some certainty and predictability with respect to injuries sustained in the course of employment. The Acts provide a clear framework within which injured employees may pursue claims against their employers and ensures they can receive payment of their medical expenses, lost wages associated with their injuries, and compensation for any permanent disabilities and/or disfigurement sustained, without having to prove fault on behalf of the employer. In exchange, the employer pays for these benefits and enjoys some predictability and limitations on the allowable damages under the Acts, assured that the Acts offer the exclusive remedy against the employer, such that no civil lawsuits, where awards may include pain and suffering and be much higher in value, may be brought against them for the same injury. Generally, an employer would be entitled to the exclusive remedies provided under the Acts, assuming that the injury or disease was accidental, arose during and in the course of employment, and is compensable under the Acts. 820 ILCS 310/5(a), 11 (West 2022); 820 ILCS 305/5(a), 11 (West 2022). So, understandably, when an employer is sued in a civil court for a work-related injury, they may look to the protection of the Acts, to defend the claim and argue for dismissal based on the Acts’ exclusivity provisions.
The Acts contain a repose period of 25 years for injury or disability caused by exposure to asbestos. See 820 ILCS 310/1(f) and 820 ILCS 305/1(f). Thus, prior to 2019, no claims could be brought under the Acts more than 25 years after the date of last exposure to asbestos. In the 2015 landmark case of Folta v. Ferro Engineering, 43 N.E. 108 (Ill. 2015), Mr. Folta claimed his mesothelioma was caused, at least in part, from exposure to asbestos while working for his employer, Ferro Engineering, for whom he last worked in 1970. Mr. Folta was diagnosed with mesothelioma over 40 years later in 2011, and filed a civil lawsuit against Ferro (and others) in state court. Ferro moved to dismiss the civil suit, arguing that Mr. Folta’s exclusive remedy was found in the Workers’ Occupational Disease Act, and could not be brought as a civil action against it. However, Mr. Folta argued that because more than 25 years had passed since his exposure to asbestos at Ferro, his claim would be barred by the 25-year repose period and is not “compensable” under the Act, leaving him without any remedy if not allowed to proceed in state court. The Illinois Supreme Court affirmed that the Act’s 25-year statute of repose acts as a complete bar, and yet still held that the Act provided Mr. Folta’s exclusive remedy against his employer. The Court noted the question of “compensability” turned on whether the type of injury sustained would fall within the scope of the Act, not whether there is an ability or possibility to recover benefits under the Act. Given that Mr. Folta’s injury was compensable, the Act provided his exclusive remedy, and his claim under the Act was time-barred by the 25-year statute of repose.
While acknowledging that the outcome may be a harsh result as to the plaintiff, leaving him with no remedy against his employer for his latent disease, the Court in Folta noted its job is not to find a compromise, but to interpret the statutes as written, suggesting if a different balance should be struck, it would be the duty of the legislature to do so. And that is what happened in 2019, when the Illinois Senate and House introduced two new statutes carving out exceptions to the exclusive remedy provisions for both the Workers’ Compensation and Workers’ Occupational Diseases Acts. Under the new statutes, the Acts no longer prohibit workers with latent diseases or injuries from pursuing their claims after the repose period in civil court. The new statute added to the Workers Occupational Disease Act, 820 ILCS 310/1.1, states:
Permitted civil actions. Subsection (a) of Section 5 and Section 11 do not apply to any injury or death resulting from an occupational disease as to which the recovery of compensation benefits under this Act would be precluded due to the operation of any period of repose or repose provision. As to any such occupational disease, the employee, the employee’s heirs, and any person having standing under the law to bring a civil action at law, including an action for wrongful death and an action pursuant to Section 27-6 of the Probate Act of 1975, has the nonwaivable right to bring such an action against any employer or employers.
When Governor J.B. Pritzker signed the bill into law in May 2019, he issued a statement, indicating the purpose of the revised legislation is to allow workers to “pursue justice,” given that in some cases, the 25-year limit is shorter than the medically recognized latency period of some diseases, such as those caused by asbestos exposure. The impact on employers, however, was not addressed. And employers were left with questions, including critically, whether this new change to the law can apply retroactively, when the statute itself is silent as to the temporal scope. Having relied on the provisions of the Acts in place at the time for basic and critical business decisions, including procurement of appropriate insurance and establishment of wages and benefits, employers cannot now go back in time and change those decisions to offset the increased liability which they now face. Further, following Folta, employers have a vested defense in the Acts’ exclusivity and statute of repose provisions. So, retroactive application of the new statutes could impose new liabilities not previously contemplated and could strip defendant employers of their vested defenses, violating Illinois’ due process guarantee. Anticipating plaintiffs’ firms would file latent disease claims against employers in civil court going forward, and with decades of case law to support prospective application only, it was just a matter of time before the issue reached further judicial scrutiny.
And that brings us to the Illinois Supreme Court’s January 24, 2025 decision in the matter of Martin v. Goodrich, 2025 IL 130509. Mr. Martin worked for BF Goodrich Company (“Goodrich”) from 1966 to 2012, where he was exposed to vinyl chloride monomer and vinyl chloride-containing products until 1974. He was diagnosed with angiosarcoma of the liver, a disease allegedly caused by exposure to those chemicals, in December of 2019, passing away in 2020. His widow filed a civil lawsuit against Goodrich alleging wrongful death as a result of his exposure, invoking the new exception found in section 1.1 of the Act to bring the matter in civil court. In response, Goodrich moved to dismiss the case based on the Act’s exclusivity provisions, arguing that section 1.1 did not apply because Section 1(f) was not a statute of repose. Alternatively, Goodrich argued that using the exception to revive Martin’s claim would infringe its due process rights under the Illinois Constitution. The district court denied Goodrich’s motion, and Goodrich asked the court to certify two questions to the US Court of Appeals for the Seventh Circuit for interlocutory appeal: first, whether section 1(f) is a statue of repose for purposes of section 1.1, and second, if so, whether applying section 1.1 to Martin’s suit would violate Illinois’ constitutional due process. Finding the questions impact numerous cases and Illinois’ policy interests, the Seventh Circuit certified the questions, and added a third question: if section 1(f) falls within the section 1.1 exception, what is the temporal reach? Answering these questions, the Illinois Supreme Court held that (1) the period referenced in section 1(f) is a period of repose, (2) the exception in section 1.1 applies prospectively pursuant to the Statute on Statutes, and therefore, (3) it does not violate Illinois’ due process guarantee.
But what did the Court mean when it held that the exception in section 1.1 applies prospectively? Goodrich argued that prospective application would mean that the exception in section 1.1 does not apply to this case, because the last exposure was in 1976, before the amendment was made, and the defendant had a vested right to assert the statute of repose and exclusivity provisions of the Act, which would prohibit the civil suit. The Court pointed out, however, that the amendment did not revive Mr. Martin’s ability to seek compensation under the Act, such that the employer’s vested statute of repose defense would apply. Rather, the amendment gave him the ability to seek compensation through a civil suit outside of the Act. So, the question becomes only whether the employer has a vested right to the exclusivity defense, such that applying section 1.1 would violate due process. The Court held that the exclusivity provisions of the Act are an affirmative defense, such that the employer’s potential for liability exists unless and until the defense is established. And a party’s right to a defense does not accrue until the plaintiff’s right to a cause of action accrues. Applying the new statute prospectively, the Court found the cause of action could be filed in civil court, because the relevant time period for considering applicability of the affirmative defense of the Act’s exclusivity is when the employee discovers his injury. Since Mr. Martin’s cause of action accrued when he was diagnosed in December of 2019, which was after section 1.1 was added, Goodrich did not have a vested exclusivity defense, so Mr. Martin’s claim may proceed without violating due process.
While the court did not apply the new statute retroactively, the effect is essentially the same from the employers’ perspective, as latent injury claims will be allowed to proceed in civil court, as long as the injuries were discovered after expiration of the repose period and after the new statutes went into effect in May of 2019. This was not the outcome defendant employers were hoping to receive, but it is what the Court decided. So, unless or until the legislative tides change again, Illinois employers should be aware of the potential for civil suits for employees’ latent injury or disease claims.
Trump’s Executive Orders Considered: Implications for Private Employers – Part Two
President Trump issued an unprecedented number of executive orders in his first week in office. In our previous update on January 27, we discussed the orders directing the elimination of diversity, equity and inclusion (“DEI”) programs in the federal agencies and government contracting, and adopting a policy of recognizing two unalterable sexes (rather than self-designated gender identity) in the enforcement of federal laws regarding sex-based rights, protections, opportunities and accommodations. In addition, President Trump has signed multiple immigration-related orders focusing on border security, restrictions on birthright citizenship, enhancement of vetting and screening of immigrants seeking entry into (and already residing in) the United States, and the prioritization of both civil and criminal enforcement of violations of the Immigration and Naturalization Act (“INA”) and other federal laws.
This update discusses the anticipated impact of the immigration-related orders on private employers and, in particular, a renewed and more aggressive focus on Form I-9 audits by the U.S. Immigration and Customs Enforcement (“ICE”) division of the U.S. Department of Homeland Security (“DHS”).
The Impact of Certain Immigration-Related Orders on the Private Sector
Two immigration-related orders signed by President Trump are particularly relevant to private sector employers:
“Protecting the American People Against Invasion” directs the “efficient and expedited removal” of individuals not legally authorized to reside or work in the U.S. and prioritizes both civil and criminal enforcement, including by taking agency action to ensure that “employment authorization is provided in a manner consistent with [the INA], and that employment authorization is not provided” to anyone not legally authorized to be in the U.S.; and
“Securing Our Borders” contains broad directives for the removal and prosecution of individuals “who violate the immigration laws” (and the prosecution of “those who facilitate their unlawful presence” in the U.S.), as well as the detention of unauthorized individuals who are apprehended as a result of agency enforcement actions.
Given the explicit directives in these orders and the administration’s enforcement-focused rhetoric, employers should expect and prepare for an uptick in both Form I-9 audits and unannounced worksite enforcement actions by ICE.
Form I-9 Process and Obligations
Form I-9 places compliance obligations on both the employee and the employer. The employee must attest, under penalty of perjury, to their identity and provide prescribed documentation evidencing their authorization to work in the U.S. The employer must (A) ensure that the form is correctly completed, (B) physically examine the identity and work authorization documentation presented by the employee to determine whether it reasonably appears to be genuine, and (C) comply with prescribed document retention requirements.1 The employer is also required to attest, under penalty of perjury, that, upon examination, the verification documents presented with the Form I-9 appeared both genuine and to relate to the named employee and, to the best of the employer’s knowledge, the employee is thereby authorized to work in the U.S. Forms I-9 must be completed (including with respect to the examination of the identity and work authorization documentation) within three business days of the employee’s date of hire.
Agency-Initiated Audits
ICE inspections2 of an employer’s Forms I-9 may be lead-driven (i.e., based on actual information or tips that an employer has hired unauthorized workers) or randomly initiated. ICE launches a Form I-9 audit by serving the employer with a notice of inspection (“NOI”). The NOI requires the employer to provide ICE with copies of the Forms I-9 and supporting documents within three business days of receipt of the NOI. ICE also may request additional records like lists of current and former employees (including dates of hire and termination), payroll and tax information, organizational documents of the employer (i.e., Articles of Incorporation, business licenses, taxpayer identification number, etc.), E-Verify or SSN Verification Service data (if applicable), copies of social security number “no-match” letters and relevant immigration-related communications with the U.S. Citizenship and Immigration Services and/or Department of Labor, and information about any prior Form I-9 audits.
If your business is served with a NOI, begin by contacting your immigration counsel for support. Carefully review the NOI to determine the scope of the audit, and respond only with those documents actually requested in the NOI. You should keep a copy of the entire response “package” provided to ICE.
ICE will review the information provided and inform you of the outcome of its audit via one of the following:
Notice of Inspection Results (“compliance letter”), if you are found to be in compliance with the law.
Notice of Suspect Documents, if ICE determines that an employee is not authorized to work. This notice will generally advise you of the potential civil and criminal penalties for continuing to employ that individual, and of your ability to begin remedial actions in “good faith” within 10 days of receiving the notice. You also may dispute such a determination prior to terminating the affected employee.
Notice of Discrepancies, if ICE is unable to determine work eligibility for an employee. This may trigger a follow-up visit from ICE and require you to request new and different employment verification documents and terminate the employee if such documents cannot be produced.
Notice of Technical or Procedural Failures, if ICE identifies technical or procedural errors in its review of the submitted Forms I-9. This notice generally advises of a 10-day period within which to correct the identified error, unless you have engaged in a pattern or practice of hiring unauthorized workers.
Warning Notice, if ICE identifies one or more substantive errors in the submitted Forms I-9 and there is an expectation that you will comply with all Forms I-9 compliance requirements in the future.
Notice of Intent to Fine, if ICE uncovers substantive failures, uncorrected procedural or technical failures, or ICE determines that you knowingly hired or continue to employ unauthorized individuals. Once served with a Notice of Intent to Fine, you may have the opportunity to negotiate a settlement with ICE or request a hearing before an administrative law judge (“ALJ”).
Final Order, if a written request for an ALJ hearing is not timely received. This Final Order is not appealable.
Penalties for Form I-9 violations may include significant monetary fines, criminal penalties, cease and desist orders to stop continued employment of unauthorized individuals, and contract debarment.
Employer Self-Audits
We encourage all employers to conduct a Form I-9 self-audit (i) to ensure ongoing compliance with applicable law, (ii) to identify any substantive and/or technical or procedural errors that may be corrected, and, (iii) to avoid or mitigate costly monetary penalties for noncompliance. Employers should look for common issues like incomplete or late Forms I-9, and missing or misplaced verification documents. Self-audits should cover Forms I-9 and verification documents for all active employees and terminated employees within the mandatory Form I-9 retention period and may not be conducted in a manner that is discriminatory or retaliatory. Specifically, an employer may not conduct an internal audit selectively based on an employee’s citizenship status or national origin, or in retaliation against any employee(s). The self-audit also should include a review of the employer’s Form I-9 collection, timing, and retention processes.
Conclusion
As we noted in our January 27 update, the breadth and tone of the executive orders issued by President Trump during his first week in office made clear that this administration’s enforcement priorities will be far more aggressive than those of the prior administration. While the laws requiring employment eligibility verification have been in effect for decades, the approach to enforcing those laws has shifted. Employers must be aware of and take steps to prepare for more frequent audits, inspections and worksite enforcement actions under the current administration.
1The INA requires an employer to retain Forms I-9 and collected identity and work authorization documentation for (i) three years after the date of hire or (ii) one year after the date of the individual’s termination from employment, whichever is later.
2Note that the U.S. Department of Justice’s Immigrant and Employee Rights Section and the U.S Department of Labor also have authority to initiate Form I-9 inspections, which may be triggered not only by complaints or suspicions of the employment of unauthorized workers, but also as a result of civil rights and discrimination complaints (for example, based on claims of discriminatory or retaliatory Form I-9 collection or self-audit processes).
Maryland’s FAMLI Program, Part III: Claims and Dispute Resolution Proposed Regulations
Starting July 1, 2026, Maryland’s Family and Medical Leave Insurance (FAMLI) law will provide up to twelve weeks of paid family and medical leave, with the possibility of an additional twelve weeks of paid parental leave, through a state-run program. Contributions from employers and employees to fund the program will begin July 1, 2025, and the Maryland Department of Labor (MDOL) is currently in the process of developing regulations to implement this law.
Quick Hits
The Maryland Department of Labor has taken an extensive approach to rulemaking for the FAMLI program, including public engagement sessions and multiple iterations of draft and proposed regulations, with the latest section on dispute resolution now open for public comment.
Proposed regulations for Maryland’s FAMLI program cover claims and dispute resolution, detailing procedures for benefit claims, employer responses, and appeals, while also highlighting significant employer concerns such as limited options to challenge fraudulent applications.
Comments on the dispute resolution proposed regulations may be submitted through February 10, 2025.
We explained in part two of this series that the MDOL has taken an unusually extensive and inclusive approach to the traditional rulemaking process, which normally involves the release of proposed regulations for comment, followed by final regulations. Here, however, the MDOL first held a series of public engagement sessions, after which it issued informal “draft” regulations at the beginning of 2024. Following amendments to the FAMLI law made during the 2024 Maryland General Assembly session, the MDOL released a second iteration of “draft” regulations. This was followed by a set of official proposed regulations, for which the comment period closed in November 2024, and now another section of proposed regulations, which are open for public comment.
The proposed regulations thus far are divided into five sections. In part two of this series, we discussed the “General Provisions,” “Contributions,” and “Equivalent Private Insurance Plans” (EPIPs) sections. In part three, we summarize the sections on “Claims,” and—just issued—”Dispute Resolution” as well as some significant employer concerns that have not been addressed by the proposed regulations.
Claims
The “Claims” section is a lengthy and detailed section of the regulations. Of particular note, there are extremely limited options for an employer to report fraud, and no guidance on how the MDOL’s FAMLI Division will handle such reports. Other important points include the following.
Definitions
The proposed regulations add the following significant definitions:
“Alternative FAMLI Purpose Leave” (AFPL) means a separate bank of employer-provided leave specifically designated for medical leave, family leave, qualifying exigency leave, or leave under a disability policy. The regulations specify that such leave must be specifically designed to fulfill a FAMLI purpose, paid, not accrued, not subject to repayment upon departure, not available for general purposes, and available without a requirement to exhaust other leave.
“General purpose leave” means employer-provided paid leave, such as general paid time off (PTO), vacation, personal leave, or sick leave.
“Good cause” refers to the inability to file a complete claim application because of an unanticipated and prolonged period of incapacity due to a serious health condition; a demonstrated inability to reasonably access a means of filing (e.g., natural disaster, power outage, or a significant and prolonged MDOL system outage); or a demonstrated failure of the employer to provide the required notification to the employee.
Required Documentation
Claimants must provide certain documentation to support their benefits claims to include personal identifying information; information about their employers; proof of relationship, meaning a signed affidavit from the employee, official governmental documentation, or documentation from licensed foster care or adoption providers; and certification of a qualifying event containing information that generally mimics the certification requirements under the federal Family and Medical Leave Act (FMLA) (the FAMLI Division will provide forms for an employee’s own or a family member’s serious health condition, and military caregiving reasons).
Employer Response
Employers have five business days to respond to notice of an application, and if they fail to respond, the claim is considered complete. If the employer challenges an employee’s eligibility for benefits, the FAMLI Division will investigate and make a determination. If the employer submits a response after the five-day period that establishes ineligibility, the employee will retain any benefits received, but additional benefits will not be paid and job protection will no longer apply.
Claim Updates
Claimants must update their claims within ten days, or as soon as practicable if there is good cause, for changes in the following: the basis for leave, the dates that leave will be taken, the duration of the leave, and whether the claimant has begun receiving workers’ compensation or unemployment insurance benefits.
Employer Notice
The proposed regulations add “6 months prior to commencement of benefits” to the required points of time in which notice must be provided to employees. In addition, the FAMLI Division will issue forms and templates that employers will be required to use for such notices.
Employee Notice
In addition to reiterating the law’s notice requirements for foreseeable and unforeseeable leave, the proposed regulations provide that employers may waive notice and will be deemed to have done so if they did not include the failure of notice in their responses to claims or if they did not inform an employee that notice is required.
Intermittent Leave
Employees must provide reasonable and practicable notice of the reason, dates, and duration of the leave. If they fail to provide reasonable and practicable notice of their intermittent leave schedule, they may be held accountable under their employers’ attendance policies, but only if the employers first notify the FAMLI Division. If an employee’s use of intermittent leave is inconsistent with the FAMLI leave approval, the employer may request additional information related to the employee’s use of FAMLI leave.
State/EPIP Notice to Claimants
Claimants will receive notice from the state program or the EPIP of the following:
submission of an application and whether it is complete;
when notice is sent to the employer;
when the employer’s response is submitted;
whether the application is approved, including details of benefits; and
whether the application is denied, with the reason and appeal rights.
State/EPIP Notice to Employers
Employers will receive notice from the state program or the EPIP of the following:
submission of an application and, if initially incomplete, a complete application;
claim determination;
reconsideration of appeal of a benefits determination; and
changes to benefits determinations.
Coordination of Benefits
Alternative FAMLI Purpose Leave (AFPL): The proposed regulations assert that an employer may require employees to use AFPL concurrently or in coordination with FAMLI leave, but only if the employer provides advance written notice of this requirement. Then, if an employee declines to apply for FAMLI leave, the employee’s FAMLI benefit eligibility is reduced by the AFPL taken. If the employee receives both, the FAMLI benefit is primary and AFPL may be used to bridge the difference between the FAMLI benefit and full pay, but the employer may deduct the full amount of time taken from the AFPL balance.
General Purpose Leave (GPL): Neither an employer nor employee can require the substitution of GPL for FAMLI leave, but they can agree in writing to use GPL to bridge the gap between FAMLI benefits and full pay. Employers must document and retain any such agreement. Unlike AFPL, only the actual amount of GPL used may be deducted from an employee’s GPL balance.
Sick leave: An employee may use sick leave prior to receiving FAMLI benefits without the employer’s agreement.
Benefit Payment
The first payment will be within five business days after a claim is approved or FAMLI leave has started, whichever is later. Subsequent payments will be made every two weeks. If there is an overpayment, such as benefits being paid erroneously or based on a willful misrepresentation of the claimant, or a claim was rejected after benefits were paid, the FAMLI Division may seek repayment.
Fraud
If fraud is proven after benefits have been approved and issued, those benefits will be treated as an overpayment and job and anti-retaliation protections will not apply.
Dispute Resolution
This newest section of the proposed regulations establishes dispute resolution procedures for the denial of a claimant’s benefits, the denial or termination of an employer’s EPIP, and the reconsideration of an employer’s contribution liability determination. It does not provide an avenue for an employer to challenge the award of benefits. Some of the more significant points follow.
Definitions
“Good Cause” for failing to timely file a request for reconsideration or an appeal is almost the same as that set forth in “Claims,” above, with the only difference being the failure by the entity issuing the adverse determination to provide notice of the dispute resolution procedures.
“Party” means a claimant, an individual who has been disqualified from receiving benefits, an EPIP administrator, and the FAMLI Division. It does not include an employer.
EPIP Denial or Termination
Employers may request review if their application for an EPIP was denied or the EPIP was involuntarily terminated. Requests for review must be filed within ten business days (absent good cause), in writing, with an explanation of why the decision was in error. Decisions will be made within twenty business days by FAMLI Division personnel who did not participate in the EPIP decision at issue, and there may be an informal conference to discuss the review request during that time.
Reconsideration of Adverse Benefit Determination
Employees may request reconsideration of a denial of benefits within thirty (apparently calendar) days (absent good cause), in writing, with an explanation of why the decision was in error. Notice is provided to all “parties” and the employer. Decisions will be made within ten business days by the FAMLI Division or an EPIP administrator personnel who did not participate in the decision at issue, and there may be an informal conference to discuss the review request during that time.
Appeal of Benefit Denials, Underpayments, or Disqualifications
Employees may also appeal an adverse decision, following a request for reconsideration. The appeal must be filed within thirty days. Again, notice is provided to “parties” and the employer. An informal conference may be held at the sole discretion of the FAMLI Division. A hearing will normally be held within thirty days of the filing, with a detailed notice to the “parties” related to the hearing itself. There are also detailed regulations regarding the hearing including: how notice may be provided; the parties’ right to representation; proceeding with the hearing where a party has failed to appear; postponement of the hearing; subpoenas; the hearing procedures; evidence; creation of the record; interpreters; the claimant’s burden of proof; recording; and recusal of hearing officers. Decisions will be issued at the conclusion of the hearing in a final written order to the parties. Such orders are subject to judicial review.
Reconsideration of Contribution Liability Determination
Employers may request reconsideration of a determination of their contribution liability, meaning the amount the FAMLI Division determines to be due each quarter, including both the employer and employee portions. Requests for reconsideration must be filed within thirty days (absent good cause), in writing, with an explanation of why the decision was in error. Decisions will be made within thirty business days by FAMLI Division personnel who did not participate in the decision at issue,
Appeal of Contribution Liability Determination
Employers may also appeal a determination, following a request for reconsideration. The appeal must be filed within thirty days. A hearing will normally be held within sixty days of the filing, with a detailed notice to the employer related to the hearing itself. There are similar provisions to those related to claims appeals, above, such as: how notice is provided; representation; failure to appear; postponement; subpoenas; the hearing procedures; evidence; creation of the record; interpreters; the employer’s burden of proof; recording; and recusal. Decisions will be issued within ninety days, and subject to judicial review.
Enforcement
Although the “draft” regulations included this section, albeit without content, neither section of the proposed regulations does. Presumably, it will be released at a later date.
Continuing Concerns
The proposed regulations do not address some significant concerns for employers. One such concern is that the ability of employers to challenge fraudulent applications for benefits is quite limited. As noted above, employers have five days in which to respond to an application. The regulations contemplate that an employer may provide relevant information after that five-day period, but if that information would result in a revocation of benefits, the employee is still entitled to the benefits already received and, more troublingly, job and anti-retaliation protection continue to apply until benefits are revoked. A separate section states that job and anti-retaliation protections do not apply once fraud is “proven.” There is no clarification of what that means or timeline for how long that might be—meaning that an employer may be required to continue active employment for an employee whom it knows to have engaged in fraud until the FAMLI Division says otherwise.
The regulations provide that, where an employee is taking FAMLI leave to care for a family member and the family member dies, the benefits continue for an additional seven days—which effectively provides bereavement leave that is not one of the specified reasons that one can qualify for leave under the FAMLI law.
While the proposed regulations permit an employer to request additional information where an employee’s use of intermittent leave is inconsistent with the leave approval, there is no provision for an employer to request additional information in response to an initial notice of the need for leave, which may be necessary to establish fraud.
Interested parties may submit comments only on the Dispute Resolution section through February 10, 2025, to the FAMLI Division at [email protected]. As noted previously, the comment period for the sections on General Provisions, Contributions, Equivalent Private Insurance Plans, and Claims has already closed. The FAMLI Division may make additional changes to the proposed regulations based on the comments it receives before issuing them in final form.
New Statutory Entitlements for Neonatal Leave and Pay in the United Kingdom
Parents of babies who require neonatal care will have a right to up to twelve weeks of leave and pay under the Neonatal Care (Leave and Pay) Act 2023, coming into force on 6 April 2025. This affects England, Scotland, and Wales, but not Northern Ireland.
Quick Hits
Under the Neonatal Care (Leave and Pay) Act 2023, employed parents whose babies are admitted to neonatal care within the first twenty-eight days of birth and remain in hospital for at least seven consecutive days have a right to up to twelve weeks of leave and pay.
The act aims to allow new parents necessary time during challenging circumstances without interfering with their maternity, paternity, or parental leave.
The UK government anticipates that approximately 60,000 new parents will benefit from the new rights.
The act will introduce additional time off as a day one right beginning on 6 April 2025. The right to neonatal leave and pay applies to individuals with a parental or significant personal relationship to a baby, born after 6 April 2025, receiving neonatal care. Eligible parents will be able to take neonatal care for each week that their baby is in the hospital, up to a maximum of twelve weeks. The leave must be used within the first sixty-eight weeks of the baby’s birth (or placement or entry to Great Britain in the event of adoption).
To qualify for neonatal pay an employee must have worked for the employer for at least twenty-six weeks before requesting leave and have earned at least £125 per week on average. This is similar to the existing entitlement for maternity pay.
The same employment protections that apply to other types of family-related leave will also apply to parents who take neonatal leave, including protection from dismissal or detriment as a result of taking or applying for neonatal leave. Employees will also remain entitled to the same terms and conditions of employment, with the exception of pay. Additionally, employees who have taken six consecutive weeks of neonatal leave will benefit from extended redundancy protection rights (if these do not already apply via an employee’s notification of their pregnancy, or through the taking of maternity, adoption, or paternity leave) with the right to return to the same job or to be offered a suitable alternative depending on the date on which the right to return is exercised.
Upcoming Changes
The updates to neonatal leave and pay are due to be implemented alongside other changes coming into force from 6 April 2025. In particular, the rate of statutory sick pay will increase from £116.75 to £118.75 per week. The statutory rates of maternity pay, maternity allowance, adoption pay, paternity pay, shared parental pay, and parental bereavement pay will also all increase from £184.03 to £187.18 per week. The lower earnings limit will also increase to £125 from £123.