Labor & Employment – Page 2

The State of Employment Law: More Than Half of U.S. States Now Have a CROWN Law

While many of these posts focus on a single state or small group of states, this post focuses on a movement that has now spread to a majority of states. Efforts have been in place for years to introduce legal protections related to hairstyles commonly worn by Black individuals and other people of color. A group of advocacy organizations has lobbied both the federal government and state governments across the country to pass CROWN (Create a Respectful and Open Workplace for Natural Hair) laws.
California was the first state to pass such a law in 2019, and as of late 2024, 27 states and the District of Columbia had passed such laws. Passage of CROWN laws does not necessarily depend on a state’s political leanings. While states such as California, Illinois, and New York have unsurprisingly passed such laws, states such as Alaska, Arkansas, and Tennessee have CROWN laws in effect as well, and CROWN legislation has been introduced in several states where such laws are not yet in effect.
As an example of such a law, Illinois’ CROWN Act, which was enacted on January 1, 2023, expanded the Illinois Human Rights Act’s definition of race to include “traits associated with race, including, but not limited to, hair texture and protective hairstyles such as braids, locks, and twists.” While the federal government currently has not passed a CROWN law, the EEOC has previously issued guidance stating that adverse action against an employee because of hair texture may constitute evidence of race discrimination.
Even though not all states currently have CROWN laws, such laws are being enacted quickly and likely will soon be in place in most of the country. Employers should review their dress code and appearance policies to ensure that they do not prohibit hairstyles historically associated with race.

E-Verify Users Must Now Generate Status Change Reports to Identify Terminated Work Authorizations

Employers enrolled in E-Verify must now generate Status Change Reports to identify employees whose work permits have been terminated due to changes in temporary status protections or similar programs.
The recent termination by the Department of Homeland Security (“DHS”) of removal protections and employment authorization for several hundred thousand individuals covered by Temporary Protected Status and parole programs has resulted in situations where a worker’s employment authorization document (“EAD”) may appear valid despite having been revoked. Previously, E-Verify would issue Case Alerts to employers where an EAD had been revoked by DHS.
As per June 23, 2025 guidance issued on the E-Verify website, Case Alerts will no longer be used for EAD revocations related to the termination of parole or other humanitarian protected status programs. Employers now “should regularly generate the Status Change Report to identify E-Verify cases created with an EAD that is now revoked” on these bases. As per the guidance, employees whose EADs were revoked between April 9-June 13, 2025 would be reflected in Status Change Reports available as of June 20, 2025.
The guidance further states that employers should not create a new E-Verify case in the event an employee appears on a Status Change Report. Rather, “E-Verify employers must use Form I-9, Supplement B, to immediately begin reverifying each current employee whose EAD the Status Change Report indicated was revoked, or after your employee voluntarily discloses to you that their EAD has been revoked, and complete all reverifications within a reasonable amount of time.” In such situations, employees may still be authorized to work in the United States based on another status or provision of law and may provide other acceptable Form I-9 documentation to the employer to demonstrate employment authorization.
E-Verify will continue to provide Case Alerts for EADs that are expiring regularly and not as a result of changes in temporary status protections or similar programs.

Department of Labor Reverses Course on Crypto Guidance for 401(k) Plans

On May 28, 2025, the Department of Labor (DOL) issued Compliance Assistance Release No. 2025‑01 (the 2025 Release), formally rescinding Compliance Assistance Release No. 2022-01 (the 2022 Release) that had urged fiduciaries to exercise “extreme care” before offering cryptocurrencies in 401(k) plans. This rescission marks a shift from placing higher security on plan fiduciaries that offered cryptocurrencies to a more neutral approach towards plans that offer this digital investment option.
The DOL’s 2022 Release
In March 2022, the DOL issued the 2022 Release, in which the agency cautioned plan fiduciaries against offering cryptocurrencies in 401(k) plans. This guidance warned fiduciaries that adding crypto options — whether coins, tokens, or any crypto-linked derivatives — could raise serious ERISA concerns due to digital assets’ volatility, valuation challenges, inexpert plan participants, custodial and recordkeeping risks, and evolving regulations. Although non-binding, the guidance conveyed that fiduciaries may breach their fiduciary duties if they fail to exercise “extreme care” when offering cryptocurrencies in 401(k) plans and further indicated the potential for investigations of plans that invested in cryptocurrencies.
The DOL’s 2025 Release
On May 28, 2025, the DOL issued the 2025 Release, which rescinded the “extreme care” fiduciary interpretation and reaffirmed that plan fiduciaries must continue to satisfy ERISA’s duties of prudence and loyalty when selecting investment options. The 2025 Release explained that the “standard of ‘extreme care’ is not found in [ERISA]” and is beyond ERISA’s ordinary fiduciary principles. The 2025 Release further underscored that the DOL is returning to its “historical approach by neither endorsing nor disapproving of plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.”
The DOL’s Revised Fiduciary Standard
Moving forward, when evaluating any particular investment type, including cryptocurrencies, a plan fiduciary’s decision must generally satisfy ERISA’s duties of prudence and loyalty, should “consider all relevant facts and circumstances,” and will “necessarily be context specific.” Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 425 (2014).

Companies Gauge Impact of Return to Office

The prevalence of remote and hybrid work varies by industry, type of job, and job level in an organization’s hierarchy. A survey from Robert Half found that, from 2023 to 2025, the proportion of job listings with hybrid work jumped from 9 percent to 24 percent, while the proportion of job listings with fully remote work rose from 10 percent to 13 percent, and the proportion of job listings with fully in-person work dropped from 83 percent to 63 percent.

Quick Hits

Remote work and hybrid work remain a growing trend.
Some employers, including federal agencies, have implemented return-to-work policies during the last two years.
Employers with a return-to-work policy may want to measure its ongoing impact on employee retention, recruitment, and productivity.

In many industries, remote and hybrid work increased dramatically during the coronavirus pandemic in 2020 and 2021. After the pandemic subsided, some employers announced new policies requiring all workers to return to the office four or five days per week. On January 20, 2025, President Donald Trump issued an executive order requiring federal agencies to end remote work and order federal employees to be present in the office five days per week.
Some employers and managers hoped a return to the office would increase productivity, strengthen the corporate culture, and promote collaboration and innovation. Did the return-to-work policy bring the intended results, or did it have unintended consequences for employers and employees?
A 2023 survey from Unispace found that 42 percent of employers that mandated a return to the office experienced higher than normal turnover, and 29 percent had a harder time recruiting employees. Productivity increased at workplaces where the use of remote work increased, even before the pandemic, according to a 2024 study from the U.S. Bureau of Labor Statistics. About 31 percent of U.S. employees were engaged at work in 2024, up from 26 percent in 2000, according to a Gallup survey.
Many employees like remote work because it eliminates their commuting time and costs, like gas and parking. The time that would have been spent commuting can be spent on work-related tasks. Remote work also gives employees greater flexibility and time to handle personal and family matters, like medical appointments and school meetings.
For employers, remote work may increase employee retention and widen the talent pool for hiring. It also may lower spending on office space, utilities, commuter benefits, and office supplies. Likewise, it may lower payroll costs because some workers will accept a lower salary for a remote position that offers better work-life balance.
Common Legal Issues With Remote and Return-to-Office Work
Americans with Disabilities Act (ADA) Accommodation Challenges: Employers face potential disability discrimination claims when mandating office returns for employees with qualifying disabilities who request remote work as a reasonable accommodation. Failure to engage in the interactive process before applying return-to-work policies to employees with disabilities can create legal liability.
Discrimination Concerns: As with most other employment decisions, selectively applied return-to-office mandates might create a perception of favoritism or unfairness, potentially creating discrimination claims based on race, gender, age, disability, and other protected characteristics.
Compensation Equity Issues: Different pay structures for remote versus in-office employees, or employees working in diverse geographic regions, may create pay equity complications or discrimination claims.
Pay Transparency Compliance Issues: An increasingly complex web of state and local pay transparency laws mandate disclosure of salary ranges in job postings or by request from current employees. Some laws require disclosure in the jurisdiction if the job could be filled by a remote worker or if the worker will perform work at a location in the jurisdiction. Complying with these laws in the context of hybrid or remote work requires careful planning.
Productivity Measurement Liability: Methods used to monitor remote versus in-office productivity could create privacy or discrimination issues if not applied consistently.
Travel Time and Expense Reimbursement: A hybrid work arrangement can give rise to complexities regarding travel time for nonexempt employees, particularly where there may be ambiguity regarding whether travel counts as commuting time or on-the-clock travel time. Moreover, in some states where expense reimbursement is required for use of personal devices, internet service, and the like, ambiguities may arise with hybrid schedules allowing employees to work remotely on a flexible schedule.
Next Steps
Employers may wish to measure the impact of return-to-work policies on productivity, recruiting, retention, payroll, and other overhead costs. This can be accomplished with employee engagement surveys, accounting software, and gathering data on cost per hire, time to hire, and turnover rates in various corporate departments and locations.
Among other compliance steps, employers may want to consider:

Developing and consistently following written standards regarding remote, hybrid, or in-office work location obligations.
Implementing a consistent, documented interactive process for employees requesting remote work accommodations.
Reviewing compensation practices and conducting pay equity audits.
Mapping out pay transparency laws and complying with state and local mandates.
Developing clear metrics to measure productivity, regardless of work location.
Reviewing policies to ensure they don’t create unintended discriminatory impacts.
Creating clear guidelines about reimbursable remote work expenses.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

Pay Equity Expands in Ohio: Cleveland Passes Ordinance

In April 2025, the City of Cleveland approved Ordinance No. 104-2025 (the “Ordinance”), which will impose a salary history ban and create a pay disclosure requirement for employers starting Monday, October 27, 2025.
The latter provision – the first in the Buckeye State to require affirmative disclosure of wages or salary ranges for advertised positions – distinguishes this Ordinance from pay equity laws already enacted in other Ohio municipalities. The new pay equity measures will apply to the City of Cleveland and private employers with at least 15 employees working within Cleveland, including job placement and referral agencies working on behalf of another employer. We discuss both requirements below.
Salary History Ban
Like similar laws in Cincinnati, Columbus, and Toledo, the Ordinance broadly prohibits covered employers from:

Asking about an applicant’s current or prior salary, including wages, commissions, hourly earnings, and any other monetary earnings, as well as benefits (collectively, their “salary history”);
Screening applicants based on their salary history (including requiring an applicant’s former salaries to meet a threshold);
Relying solely on an applicant’s salary history when deciding whether to make an offer of employment or determining their compensation; and
Refusing to hire or otherwise retaliating against an applicant for not disclosing their salary history.

The new salary history protections do not apply to independent contractors, but otherwise cover most individuals applying for full-time, part-time, temporary, seasonal, contracted, and commissioned roles that will be performed for a covered employer in Cleveland, regardless of whether the person is interviewed for the role. However, the ban does not apply:

when federal, state, or local law specifically authorizes using salary history to determine compensation;
to internal transfers or promotions;
to salary history disclosures made by an applicant, if voluntary and unprompted;
to re-hires, where prior pay history is already known;
when pay rates are established through collective bargaining; or
to governmental employers other than the City of Cleveland.

The Ordinance also carves out an exception for information inadvertently obtained through a background check, as long as such information is not “solely relied upon” to determine an applicant’s salary.
Additionally, covered employers are free to ask about the applicant’s salary expectations and any objective measures of the applicant’s prior productivity, including revenues, sales, or other production reports. Employers may also ask applicants whether they would forfeit any unvested equity or deferred compensation if they resign from their current job.
Pay Disclosure Mandate
The Ordinance also requires covered employers to disclose the salary range or scale when advertising most job openings. The disclosure must include any compensation the successful candidate will receive, including wages, commissions, hourly earnings, and other monetary earnings, as well as benefits. Notably, the Ordinance does not specify any limits for determining the breadth of the salary range.
The pay disclosure requirements apply to any notice, advertisement, or formal job posting for roles that will be performed in Cleveland, except for postings related to independent contractors, internal transfers or promotions, or a position where the salary is determined by collective bargaining procedures. And like the salary history ban, the pay disclosure mandate exempts governmental employers other than the City of Cleveland.
Enforcement Provisions, Including an Opportunity to Cure
The Ordinance permits any person (including non-employees) to file a written complaint against a covered employer with Cleveland’s Fair Employment Wage Board (FEWB) within 180 days of an alleged violation. If the FEWB determines by a preponderance of the evidence that the employer has violated the Ordinance, the Board will notify the employer and attempt to resolve the complaint “by education, conference, conciliation, and persuasion with all interested parties.”
An employer will face no penalty if, within 90 days of being notified of the complaint, the employer corrects its practices and provides the FEWB with a plan to adhere to the Ordinance. However, an employer that does not remedy its practices within the 90-day deadline may face civil penalties up to $1,000, $2,500, or $5,000, depending on whether it had prior violations within the last five years. The FEWB will adjust the amount of the civil penalties annually by February 1 in connection with changes to the consumer price index.
Potential for State Pushback
While several Ohio cities have a history of enacting their own labor and employment laws, the State of Ohio does not always welcome these measures. For example, Cleveland sought to raise its minimum wage to $15/hour in 2016, but before residents could vote on the proposal, the state legislature passed a law prohibiting municipalities from setting their own minimum wages. Although the state has not reacted to Columbus, Cincinnati, or Toledo’s pay equity measures to date, the broad requirements of the Cleveland ordinance could push the Ohio legislature to intervene. We will watch for any developments related to this Ordinance and similar local laws.
In the meantime, covered employers should watch for any further guidance and start to evaluate their job advertisements, employment applications, and other hiring and salary determination processes to ensure compliance with the City’s pay equity measures before they take effect this October.

AI, Deepfakes, and the Rise of the Fake Applicant – What Employers Need to Know

In an age of artificial intelligence and technological advances that improve the quality of deep fake programming, companies must remain vigilant to protect their brand and assets. They also have to be wary of who is applying for open positions. The person applying and going through the interview and selection process may not be the same as the person who shows up on the job. In fact, the person applying may not be a person at all.
The Proliferation of Fake Applicants and Corresponding Dangers to Businesses
Generative AI tools that can create fake resumes, images, and voices are leading a surge in fraudulent job applicants, particularly for remote positions. Recent news stories have focused on companies hiring contract workers operating in North Korea, but the problem is more widespread than state hackers. A leading research firm predicts that over the next three years 25% of job candidates globally could be fake.
The motives are varied. Sometimes it is a talented individual impersonating the real applicant to help the applicant pass pre-employment assessments or impress during interviews. Other times an individual will utilize AI to respond to questions that the individual would not otherwise be qualified to answer. Unfortunately, but not surprisingly, there are also malicious actors looking to get access to company networks, install malware, steal proprietary information, or engage in other misconduct.
Another area of concern for businesses is compliance with child labor laws. With the growth of sophisticated generative AI, applicants are supplying paperwork that can pass muster under the E-Verify process both as to age and eligibility for employment in the United States. Both under the Biden and Trump administrations the government has taken a very aggressive enforcement stance seeking to hold employers strictly liable for violations, even if the company complied in good faith with the E-Verify process.
Best Practices to Detect and Deter Fake Applicants
Companies can employ a variety of potential strategies to detect and deter improper or malicious activity. There has been a growth of companies selling AI or other services designed to counter and combat fraudulent applicants as the technological arms race in this area continues. Before selecting a service, a company should be aware of the potential exposure that utilizing third-party services can have in this area. Each hiring process is unique, and counsel at Bradley can advise your company on specific steps to incorporate into the screening and hiring process to maximize effectiveness.
Here are a few best practices to consider:

Train recruiters and hiring agents. Companies should ensure that their recruiters and hiring agents are aware of the risks and take appropriate steps to minimize fraud. One security firm thwarted an AI deepfake by asking the individual to wave his hand in front of his face, which the bot was unable to do. Make sure candidates are on camera and disable their video filters. Consider asking the applicant to use screen sharing to show a relevant document.
Consider more in-person interactions. While it may not be economically feasible for a company to conduct all interviews onsite, increasing in-person interactions before a final hiring decision can help uncover fraud. There may be value in having the applicant deliver certain documents in person rather than by email.
Coordinate with IT. IT personnel can assist during and after the hiring process to mitigate fraud. Questionable remote workers may look to have equipment sent to locations other than their stated address (even outside the country). IT or other personnel could assist in cross referencing resume details with other sites (LinkedIn, etc.) or resources.
Utilize detection tools. A variety of companies now offer tools and systems to detect fraud, such as facial recognition and other systems that verify identities. Indeed, some companies tout the use of AI technologies to detect an applicant’s use of AI technologies. As outlined in the next section, though, companies need to be careful before they utilize such products.

Complications for Businesses That Attempt to Address the Issue
As the technology evolves, more and more companies are offering services to detect fake job applicants. Before a company begins utilizing such services it is important that the company consider the potential areas of exposure. First, any type of system used to screen applicants could have a disparate impact on certain legally protected groups. If the screening tool has not been properly validated, its use could violate state or federal employment laws. Companies should conduct proper due diligence on the vendors selling the product to understand how the product was developed, whether there may be a disparate impact, and whether proper validation data supports the use of the product for the jobs in question. Knowing that a company can be held liable for the discriminatory impact of its vendors’ services, companies should ensure that their contracts with vendors contain sufficient insurance and indemnification provisions and other requirements.
Specific types of technologies can also have unique risks. Facial recognition technology may be effective to ensure the worker hired is the same person as the worker interviewed, but many states and localities have laws governing, and potentially prohibiting, the use of such technologies. And the remote location of applicants could impact which laws apply.
Finally, while there may be differences between the use of such detection systems and a regular background check, the law in this area is not fully developed with respect to these new technologies. If a process is considered a background check, then the Fair Credit Reporting Act (FCRA) may impose special requirements before it can be used, including specific disclosures to applicants, written authorization, and other certification procedures.
Your applicants may be fake, but the potential damages to your organization are quite real. If your company is concerned about the proliferation of deepfakes and applicant abuse or is considering changes to its screening or hiring process, you should investigate options to minimize costs and exposure.
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Supreme Court Limits ADA Claims to Employees and Applicants, Not Retirees

In, Stanley v. City of Sanford, Florida, the U.S. Supreme Court clarified the scope of the Americans with Disabilities Act, holding that Title I’s employment discrimination provisions do not apply to individuals who are retired and no longer hold or seek employment. The decision, a 7-2 majority written by Justice Neil Gorsuch, gives employers a clear win concerning retirees and the ADA, specifically that a retiree who is not holding or seeking employment is not a qualified individual under the ADA and therefore cannot bring a successful suit under that statute.
The Facts
Karyn Stanley, a former firefighter for the City of Sanford, Florida, was forced to retire in 2018 due to a disability. Under the city’s revised 2003 policy, employees who retired due to disability received only 24 months of health insurance, compared to those employees who retired with 25 years of service who received coverage until age 65. Stanley sued under the ADA, alleging the policy discriminated based on her disability.
Importantly, Stanley filed suit in 2020, about two years into her retirement and a few months before her benefits were about to be terminated. The outcome of the case may have been different if she brought suit while she was still employed.
The Ruling: Clear Textual Limits on Title I of the ADA
The decision affirmed the Eleventh Circuit’s dismissal of the claim, holding that Title I of the ADA protects only “qualified individuals”—those who hold or desire a job and can perform its essential functions. The court emphasized Congress’s use of present-tense language—“holds or desires” a position—and the statutory requirement that the person be able to “perform the essential functions” of the job with or without reasonable accommodation at the time the person allegedly suffers discrimination. This definition does not apply to individuals who have already exited the workforce and are not seeking re-employment at the time the individual suffers discrimination.
The court dismissed arguments that retirees are nonetheless covered because they once held a job. “The statute protects people, not benefits, from discrimination,” Gorsuch wrote, reinforcing the view that Title I is designed to prevent workplace discrimination against qualified individuals—not to govern post-employment benefits for retirees.
Why It Matters for Employers
The ruling reinforces that the ADA’s employment protections are not unlimited. To be able to assert an ADA claim, an employee or applicant must be able to perform the essential functions of the position held or desired. Retirees who are not working cannot, by definition, meet that threshold ADA requirement. Furthermore, the timing of Sanford’s suit – after she had already retired – ultimately doomed her ADA case when viewed in light of the ADA’s plain language.
The court was careful to note that its decision does not preclude other legal avenues, such as claims under the Rehabilitation Act, state law, or constitutional equal protection claims. But critically, ADA Title I cannot be stretched beyond its plain text to cover retirees.
Conclusion
The Stanley decision reinforces a principle many employers have long understood: that the ADA only applies to employees or applicants who are qualified, which means they can perform the essential functions of the job they hold or desire. The Supreme Court made it clear that a retiree cannot be qualified under Title I of the ADA because the retiree is not seeking to perform the essential functions of a job that he/she holds or desires. Employers still face potential ADA liability from current employees or applicants, and employers should review their job descriptions to make sure they are as accurate as possible and define the job’s essential functions to be in the best position to defend themselves against ADA claims in the future.
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Texas SB 1318 Tightens Physician Non-Compete Rules, Extends Restrictions to Other Healthcare Practitioners

Takeaways

More stringent requirements for physician non-compete agreements, including a five-mile geographic limit and a one-year duration cap, will take effect 09.01.25.
Non-compete buyouts for physicians are capped at the physician’s total annual salary and wages at termination.
New restrictions apply to non-compete agreements with dentists, nurses, and physician assistants.

Oregon Court of Appeals Holds That Handbooks Can Form Contracts Unless Clearly Disclaimed

The Court of Appeals of the State of Oregon recently clarified in Dailey v. University of Portland that under Oregon law, handbooks can form contracts unless there is a clear disclaimer. The court emphasized that conspicuous and unambiguous disclaimers can prevent statements in handbooks from becoming contractual statements.

Quicks Hits

In Dailey v. University of Portland, the Court of Appeals of the State of Oregon addressed the enforceability of handbook provisions as a “contract.”
Generally, Oregon law recognizes that handbook provisions can form a contract unless effectively disclaimed.
The court emphasized that employers must ensure disclaimers are clear, prominently placed.

Background
Stephen Dailey was a student in the University of Portland’s doctoral nursing program. He began the nursing program in 2015. However, in 2017, due to personal circumstances, he reduced his course load. The following year, in 2018, he took a leave of absence and did not return until three years later, at which point he reenrolled in the program. To earn his degree, Dailey was required to complete a specific sequence of academic and clinical courses within a six-year period.
According to the university’s intranet bulletin, nursing students’ clinical courses must have a supervisor with a minimum of 2,080 hours of licensed experience. For two semesters, Dailey’s clinical supervisors did not meet this requirement, as neither had the necessary licensed experience.
Dailey was ultimately unable to complete the program within the permitted six-year timeframe and withdrew. Dailey brought a breach of contracts claim against the university, arguing that disclaimers in its general student handbook, nursing school handbook, and online bulletin were ambiguous and gave rise to contractual obligations for the university to find clinical opportunities for Dailey.
The Court’s Decision
The appeals court agreed with the university that clear and conspicuous disclaimers can prevent handbook provisions from forming a contract. The court, however, found that while the general student and nursing school handbook’s disclaimers were clear and conspicuous, the university’s disclaimer on its bulletin was “tucked away in a mousehole.” To access the bulletin’s disclaimer, a reader had to click through two separate webpages without any clear indication that a disclaimer would be found there. The court noted that the university’s disclaimer was therefore effectively hidden. The court held that, as a matter of law, the disclaimer was not conspicuous enough to defeat the plaintiff’s contract claim and reversed the trial court’s grant of summary judgment.
Key Takeaways for Employers

Although the case involved a student rather than an employee, the law applies equally in the employment context.
Employers may consider placing clear and conspicuous disclaimers in their employee handbooks, personnel policies, and intranet-based policies to ensure that such documents do not inadvertently become enforceable employment contracts.

New Restrictions on Non-Compete Agreements Coming to Colorado

Colorado generally prohibits restrictive covenants, except in narrow circumstances. On May 8, 2025, the Colorado Legislature passed Senate Bill 25-083, which imposes three significant new limitations on the use of restrictive covenants for certain healthcare providers and narrows their application in business sales. These changes will apply to agreements entered into or renewed on or after August 6, 2025.
Current Law Overview
Under current law (C.R.S. § 8-2-113), non-compete and customer non-solicitation agreements are enforceable only in certain circumstances. For instance, non-competes are enforceable for “highly compensated individuals” when the agreement is reasonably necessary to protect an employer’s trade secrets. However, covenants that restrict a physician’s right to practice medicine after leaving an employer are already void under Colorado law.
Key Changes Under SB25-083 Broader Ban on Non-Competes for Healthcare Providers
The amendment prohibits non-compete and non-solicitation agreements for certain licensed healthcare providers, even if they meet the “highly compensated” threshold. This includes those who:

Practice medicine or dentistry
Engage in advanced practice registered nursing
Are certified midwives
Fall under additional categories listed in C.R.S. § 12-240-113

Liquidated Damages in Physician Contracts
Previously, physician employment agreements could include liquidated damages tied to termination or competition. This amendment removes that provision, meaning that:

Agreements with unlawful restrictive covenants are unenforceable.
Agreements without unlawful provisions remain enforceable and may still carry damages or equitable remedies.
It remains unclear whether competition-related liquidated damages are still enforceable under the new law.

Expanded Patient Communication Rights
Medical providers can no longer be restricted from informing patients about:

Their continued medical practice
New professional contact information
The patient’s right to choose their healthcare provider

Confidentiality and trade secret agreements are still allowed, as long as they don’t prevent sharing general knowledge.
New Limitations on Business Sale Non-Competes
Colorado law has long permitted non-competes in connection with the purchase or sale of a business. SB25-083 narrows this by:

Allowing non-competes only for owners of a business interest
Placing time limits on non-competes for minority owners or those who received ownership through equity compensation

For these individuals, the non-compete duration is capped using a formula: Total consideration received ÷ Average annual cash compensation in the prior two years, or the duration of employment if less than two years.

New Jersey Pay Transparency Law: NJ DOL Releases Guidance

Covered employers in New Jersey must now comply with pay transparency obligations for job advertisements and promotional opportunities, as described in our prior GT Alert. As a reminder, covered employers include any person, company, corporation, firm, labor organization, or association that has 10 or more employees over 20 or more calendar weeks, and does business, employs persons, or takes applications for employment within New Jersey. The New Jersey Department of Labor (NJ DOL) has now provided interpretative guidance on the new law in an FAQ.
Notable provisions in the FAQs include the NJ DOL’s position that an employer need not have an employee in New Jersey to be covered by this law:
Must an employer have an employee in New Jersey to be covered by the Pay Transparency law?
No. Under the Pay Transparency law, an employer may still be covered if it has 10 or more employees over 20 calendar weeks, whether those employees work inside or outside of New Jersey. However, if none of the employer’s employees work inside New Jersey, the employer will only be covered if it does business in New Jersey or takes applications for employment within New Jersey.
The FAQ also addresses nationwide job postings:
Are nationwide job postings included under the [New Jersey] Pay Transparency law?
It depends. If the employer has the minimum number of employees to be covered by the Pay Transparency law and the employer does business, employs persons, or takes applications for employment within New Jersey, then yes, its job postings must comply with the law, even if the employer is advertising nationally or accepting applications from anywhere in the country.
The NJ DOL also includes details regarding potential penalties:
Penalties for employers violating the Pay Transparency law.
Any employer who violates the Pay Transparency law can be assessed a penalty up to $300 for the first violation, and up to $600 for each subsequent violation.
Under the law, if an employer publishes the same job posting in multiple places at the same time – for example, in a newspaper, job search websites, and social media – NJDOL must consider these posts collectively as one violation of the law.
However, if an employer advertises multiple roles in its organization at the same time, NJDOL will assess one penalty for each role where the job posting fails to comply with the law.
(emphasis in original).
Employers should review these FAQs to confirm their understanding of their obligations under New Jersey’s Pay Transparency law and consult with with counsel to address any compliance questions.

Washington Overhauls Employment Laws on Reductions in Force and Background Checks

The Washington State Legislature has been busy as usual this session.
Two bills with significant implications for employers operating in Washington have recently been signed into law by Governor Bob Ferguson: a state “mini-WARN” (Worker Adjustment and Retraining Notification) Act and amendments to Washington’s Fair Chance Act (WFCA), which covers background checks in the employment context.
This Insight summarizes these recently signed laws and their potential consequences for employers.
Washington’s New Mini-WARN Act
Senate Bill 5525, also known as the Securing Timely Notification and Benefits for Laid-Off Employees Act, creates a new state law effective July 27, 2025, that requires notice to certain workers facing employment loss due to a reduction in force, i.e., a business closing or mass layoff. Many employers are already familiar with the federal WARN Act. Employers that employ 50 or more employees in the state of Washington must also comply with Washington’s requirements.
As with the federal WARN Act, Washington law prohibits an employer from enacting a “business closing” or “mass layoff” until the end of a 60-day period. That period begins when the employer serves written notice that must contain certain specific information regarding the closing or layoff to both the affected employees (or, if applicable, the employee’s bargaining representative) and the Washington Employment Security Department (ESD). The information required in the notice is the same information required in a notice provided under the federal WARN Act. In a move that diverges from federal WARN, employers may not include an employee in a mass layoff if the employee is currently on Washington Paid Family or Medical Leave, with some exceptions for circumstances that were not reasonably foreseeable, completed construction projects, and natural disasters.
Under the new Washington law, an “employee” is a worker who works an average of 20 or more hours per week and has been employed by the employer for at least six of the 12 months preceding the notice requirement (see below).
A “business closing” is a shutdown of a single site of employment of one or more facilities that will result in “employment loss” (termination, other than for cause, voluntary separation, retirement, or a layoff for more than six months) for 50 or more full-time employees. A “mass layoff” is a reduction in employment force that results in an employment loss during any 30-day period of 50 or more full-time employees. “Single site of employment” means a single location or a group of contiguous locations, such as a group of structures that form a campus or business park or separate facilities across the street from each other.
“Employment loss” does not include circumstances when a business closing or mass layoff is the result of the relocation or consolidation of part or all of the employer’s business if, (1) before the business closing or mass layoff, the employer offers to transfer the employee to a different site of employment within a “reasonable commuting distance” and (2) there is no more than a six-month gap in employment.
In the case of the sale of part or all of a business, the seller is responsible for providing notice of any business closing or mass layoff that will take place up to and on the effective date of the sale. The buyer is responsible for providing notice of any business closing or mass layoff that will take place thereafter.
An employer that has previously announced and carried out a short-term mass layoff of three months or less that is extended beyond three months due to business circumstances not reasonably foreseeable at the time of the initial mass layoff is required to give notice when it becomes reasonably foreseeable that the extension is required. Although the law is not explicit, it appears that in this limited circumstance, the mass layoff would be treated as an employment loss from the date of the notice of extension. Otherwise, a mass layoff extending beyond three months from the date the mass layoff commenced for any other reason must be treated as an employment loss from the date of commencement of the initial mass layoff.
The following are exceptions to Washington’s written notice requirement in the event of a business closing or mass layoff:

The employer is actively seeking capital or business that would allow avoidance of the mass layoff, and when providing notice would have precluded the employer from obtaining the needed capital or business.
The mass layoff or business closure is caused by circumstances not reasonably foreseeable at the time notice is required.
The mass layoff or business closure is caused by a natural disaster; or
The mass layoff occurs at a construction project, under certain circumstances.

If an exception applies only to part of the 60-day notice window, an employer is required to give notice at the time the exception is no longer applicable.
As with the federal WARN Act, employers that do not provide notice to employees and whose business closure or mass layoff does not fall under an exception to the notice requirement are liable for the following each day notice is not provided: (1) back pay for each day of violation, up to 60 days, and (2) the value of benefits to which the employee would have been entitled had their employment not been lost, up to 60 days. The employer may credit any wages paid during the period of violation, or certain other payments made, against the penalty amounts owed. The employer is also subject to a civil penalty of up to $500 per day for each day of the violation, unless the employer pays employees the amounts for which the employer is liable within three weeks from the date the employer orders the mass layoff, relocation, or termination.
The ESD can bring an action on behalf of an aggrieved employee for violations of the new law. An aggrieved employee or their bargaining unit may also bring an individual civil action against the employer. The statute of limitations for violations of this law is three years, and the ESD, the employee, or the employee’s bargaining unit may be entitled to attorneys’ fees if they prevail. If a court determines that an employer conducted a “reasonable investigation in good faith and had reasonable grounds to believe that its conduct was not a violation of this chapter,” the court has discretion to reduce the penalty assessed against the employer.
Updates to Criminal Background Checks Under Washington’s Fair Chance Act
Many employers use criminal background checks as part of their onboarding process. HB 1747 amends the WFCA, which was enacted in 2018, significantly expanding the WFCA’s scope and aligning Washington law with stricter background check laws in states such as California and New York. The amendments take effect on July 1, 2026, for employers with 15 or more employees across all states and on January 1, 2027, for employers with fewer than 15 employees.
Under the amended WFCA, an employer is prohibited from asking for or obtaining any information about an applicant’s criminal record until the employer determines that the applicant is otherwise qualified for the position and makes a conditional offer of employment to the applicant. In addition, employers cannot implement a policy or practice that automatically or categorically excludes an applicant with a criminal record. This includes rejecting an applicant solely because they failed to disclose their criminal record prior to the initial determination that they are qualified. A “criminal record” now includes not only the actual record of an arrest or citation for criminal conduct but also “information about” an arrest or citation, expanding the scope of the criminal background information subject to the WFCA. The phrase “information about” is not defined in the amendments.
An employer is permitted to disclose to the applicant that the position is subject to a background check after a conditional offer of employment is made. Similarly, an applicant may voluntarily disclose, without solicitation by the employer, information about the applicant’s criminal record during an interview. If such a disclosure is made by either party, the employer must immediately inform the applicant in writing of the requirements relating to criminal history and tangible adverse employment actions under the amended WFCA and provide the applicant a copy of the Washington State Attorney General Office’s (AGO’s) Fair Chance Act Guide for Employers and Job Applicants (“Fair Chance Act Guide”).[1]
Certain employers are exempt from the WFCA’s requirements, including employers hiring individuals with unsupervised access to children or vulnerable adults, employers expressly allowed or required to consider an applicant’s criminal history under state or federal law, law enforcement and criminal justice agencies, and an employer seeking a non-employee volunteer.
An employer’s ability to carry out a tangible adverse employment action based on an applicant’s or employee’s criminal history is limited. A “tangible adverse employment action” is a decision by an employer to reject an otherwise qualified job applicant or to terminate, suspend, discipline, demote, or deny a promotion to an employee. An employer is prohibited from carrying out a tangible adverse employment action based on an applicant’s or employee’s arrest record or juvenile conviction record, except for an adult arrest in which the individual is out on bail or released on their own personal recognizance pending trial.
The most significant amendment to the WFCA is that it permits an employer to carry out a tangible adverse employment action based on an applicant’s or employee’s adult conviction record only if the employer has a legitimate business reason for doing so. The employer has a “legitimate business reason” if the employer believes in good faith that the nature of the criminal conduct in the conviction record will:

have a negative impact on the employee’s or applicant’s fitness or ability to perform the position sought or held, or
harm or cause injury to people, property, business reputation, or business assets, and the employer has considered and documented certain factors, including:

the seriousness of the conduct underlying the conviction,
the number and types of convictions,
the time that has elapsed since the conviction (excluding periods of incarceration),
specific duties of the position,
the place and manner in which the position will be performed (e.g., whether it is a public-facing role), and
any verifiable information related to the individual’s rehabilitation, good conduct, work experience, education, and training, as provided by the individual.

Prior to carrying out a tangible adverse employment action, the employer must notify the applicant or employee and identify the record on which the employer is relying to assess the legitimate business reason. The employer must then hold the position open for at least two business days to give the applicant or employee a reasonable opportunity to correct or explain the record or to provide information of rehabilitation, good conduct, work experience, education, and training.
If the employer makes a tangible adverse employment decision based on the conviction record, the employer must provide the applicant or employee with a written decision that includes specific documentation of its reasoning and an assessment of the relevant factors described above.
Employers are prohibited from carrying out any tangible adverse employment action against any employee because the employee (or a person acting on behalf of the employee) makes a good-faith report to the employer, the AGO, a labor organization, or others of a violation of the requirements relating to a tangible adverse employment action or otherwise informs others of the requirements.
The amendments to the WFCA include steeper penalties for violations. The AGO, which enforces the WFCA, may impose (1) a monetary penalty of up to $1,500 for the first violation or waive penalties for first-time or de minimis violations and instead provide education and a warning to deter future noncompliance; (2) a penalty of up to $3,000 for the second violation; and (3) a penalty of up to $15,000 (up 15 times from the original penalty of $1,000) for third and subsequent violations. The AGO is no longer required to use a stepped enforcement approach for violations. In addition, the AGO may pursue legal action to obtain unpaid wages, unpaid administrative penalties, damages, and reasonable attorneys’ fees and costs.
As with prior versions, there is no private right of action for violations of the WFCA.
What Employers Should Do Now
Employers with employees in Washington State should consider taking the following steps:

Consult with employment counsel before any business closing or mass layoff to ensure compliance with both the federal WARN Act and Washington State’s new mini-WARN Act.
Update background check policies, including pre- and post-adverse action notifications, for compliance with the amendments to the WFCA.
Work with employment counsel to establish new protocols for your background check process, including how staff will consistently perform the “legitimate business reason” test for applicants and employees with criminal histories.

Staff Attorney Elizabeth A. Ledkovsky contributed to the preparation of this Insight.
ENDNOTE
[1] While the Fair Chance Act Guide is currently available on the AGO’s website, we believe the guide will be updated once the amendments to the WFCA go into effect.