Burn Grooming Policy, Burn? Third Circuit Reignites Bearded Firefighter’s Religious Accommodation and Free Exercise Claims
If you have a grooming policy based on safety factors (like no beards for firefighters), does that trump an employee’s request for a religious accommodation? Maybe not. A recent Third Circuit decision, Smith v. City of Atlantic City, et al., addressed this issue and partially reversed a district court’s grant of summary judgment in favor of Atlantic City. The court revived a firefighter’s claims under the Free Exercise Clause and Title VII. The decision offers important guidance on how courts evaluate workplace grooming policies and employers’ obligations to accommodate religious beliefs.
Burning Through the Facts
Alexander Smith, a long-serving firefighter, served as the city’s only assigned air mask technician — a role that required him to maintain SCBA (self-contained breathing apparatus) units but not to enter hazardous environments. As a Christian, Smith requested that the city allow him to grow a beard as an accommodation to his sincerely held beliefs.
The city’s grooming policy mandates that firefighters be clean shaven while on duty, citing safety concerns related to SCBA seal integrity. However, the policy contains exceptions: (1) captains may allow deviations at their discretion, assuming responsibility for any unfavorable outcome, and (2) administrative personnel, like Smith, were not required to undergo annual SCBA fit testing — despite being subject to the same policy.
Although Smith did not insist his demand was an all-or-nothing accommodation, the city denied his request without discussing whether certain alternatives might satisfy his religious beliefs. Subsequently, he was informed he would be suspended if he refused to shave.
Smith filed a lawsuit claiming that the city’s denial of his requested accommodation was religious discrimination in violation of Title VII, as well as a violation of his right to freely exercise his religion guaranteed by the First Amendment. The district court granted the city’s motion for summary judgment, and Smith appealed.
The Third Circuit Turns Up the Heat
The Third Circuit vacated summary judgment on Smith’s Free Exercise Clause and Title VII accommodation claims, finding that:
The city’s grooming policy was not generally applicable because it allowed formal and informal exceptions that undermined the city’s stated safety interest. This triggered strict scrutiny under the Free Exercise Clause. (The strict scrutiny standard required the city to prove that it had a compelling state interest and that its actions were narrowly tailored or the least restrictive means to achieve that interest.)
The city’s actions were not narrowly tailored to achieve its compelling interest. While safety is a compelling interest, the city did not explore less restrictive alternatives such as fit testing Smith with a beard or continuing to exclude him from suppression duties, as it had done for years.
The city did not demonstrate that granting the accommodation would pose an undue hardship under Title VII. Applying the Supreme Court’s standard from Groff v. DeJoy, the appeals court held that speculative risks do not qualify. The record showed no evidence that Smith’s beard posed an actual operational risk, especially given his role and the infrequency of emergency calls that might require him to wear an SCBA.
Lessons from the Ashes: Takeaways for Employers
Considering this decision, employers should understand:
Religious accommodations must be taken seriously. A blanket policy — even one rooted in safety — may not be sufficient if it allows discretion or contains exemptions.
Interactive process matters. Employers should engage with employees to assess alternative accommodations before denying requests.
The Groff standard is here to stay. “Undue hardship” under Title VII requires a showing of substantial, excessive, or unjustifiable burden — not mere inconvenience or administrative hassle.
If your workplace grooming policies contain any exceptions — or if you receive an accommodation request related to those policies — consult your employment counsel early. Proactive legal guidance is critical to ensure compliance and mitigate risk.
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Supreme Court Rejects Heightened Standard for Discrimination Claims from Majority Groups
On June 5, 2025, the Supreme Court of the United States ruled that employees who are part of a majority group do not have a higher evidentiary standard to prove workplace discrimination. The ruling revived a heterosexual woman’s lawsuit alleging she was discriminated against in favor of employees who identify as gay, and potentially opens the door for more discrimination lawsuits from people in majority groups.
Quick Hits
In Justice Ketanji Brown Jackson’s unanimous opinion, the Supreme Court held that plaintiffs who are part of a majority group cannot be held to a higher standard of proof in employment discrimination cases.
In this case, called Ames v. Ohio Department of Youth Services, a heterosexual woman alleged sex and sexual orientation discrimination.
The court’s decision potentially opens the door to more lawsuits from plaintiffs who belong to majority groups.
The Supreme Court unanimously rejected the Sixth Circuit’s “background circumstances” rule, which had required majority-group employees to provide extra evidence of employer discrimination to succeed in Title VII discrimination claims. The ruling means that, going forward, majority-group discrimination claims (or so-called “reverse discrimination” claims) will be analyzed using the same framework as minority-group discrimination claims, where a plaintiff can rely on their own circumstances to prove a prima facie case.
The background circumstances rule “cannot be squared with the text of Title VII or the Court’s precedents,” the Supreme Court stated.
This decision comes against the backdrop of President Donald Trump’s recent executive orders to stop “illegal” workplace diversity, equity, and inclusion (DEI) programs and reshape how federal policy defines sex discrimination and gender.
Background
The plaintiff in this case is a heterosexual woman who was employed by Ohio Department of Youth Services. She applied for and interviewed for a promotion, but the department instead offered her another job that amounted to a demotion with less pay, which she took. The department later hired a gay man to serve in her prior role, and promoted a lesbian woman to the position she had sought. The plaintiff alleged employment discrimination based on sex and sexual orientation under Title VII.
The district court granted summary judgment for the department, finding that the plaintiff failed to establish “background circumstances,” which could include statistical evidence or evidence that gay managers made the employment decisions at issue. The plaintiff appealed, and the U.S. Court of Appeals for the Sixth Circuit affirmed the lower court’s ruling under the background circumstances test. The Supreme Court overturned the Sixth Circuit’s ruling.
No Background Circumstances Required Under Title VII
The Supreme Court held that Title VII does not require majority group members to show additional background circumstances. Writing for the court, Justice Jackson noted that, “Title VII’s disparate-treatment provision draws no distinctions between majority-group plaintiffs and minority-group plaintiffs.”
As such, Title VII applies whenever an individual was treated differently because of their race, color, religion, sex, or national origin. Justice Jackson stated that, by establishing “the same protections for every ‘individual’—without regard to that individual’s membership in a minority or majority group—Congress left no room for courts to impose special requirements on majority-group plaintiffs alone.”
Justice Jackson further rejected the Sixth Circuit’s application of the background circumstances rule, as it was contrary to Title VII’s statutory text and the court’s precedent. Such an application “misses the mark by a mile,” Justice Jackson wrote.
In addition, Justice Clarence Thomas wrote a separate concurring opinion in which he criticized judges for creating “atextual legal rules and frameworks.” He argued that “judge-made doctrines,” such as the background circumstances rule, “can distort the underlying statutory text.” Justice Thomas further questioned whether the McDonnell-Douglas burden shifting test for Title VII claims remains a useful tool, potentially inviting future reconsideration.
Next Steps
The Supreme Court’s decision in this case is consistent with guidance from the U.S. Equal Employment Opportunity Commission (EEOC), which released two technical assistance documents to explain what constitutes illegal diversity, equity, and inclusion (DEI) programs in the workplace. In those documents, the EEOC rejected the background circumstances rule. It takes the position that majority-group plaintiffs bear the same evidentiary standard as minority-group plaintiffs.
Going forward, this casemay invite additional discrimination claims by members of majority groups. Therefore, employers may wish to review their policies and practices to ensure protection of all employees against discrimination, regardless of whether the employee falls within the minority or majority group.
Northern Ireland: Gender Pay Gap Reporting
In February 2025, the Department for Communities in Northern Ireland closed a public consultation that began late last year on the proposed introduction of a requirement for Northern Ireland employers to report on their gender pay gap.
Quick Hits
Unlike England, Scotland, and Wales, Northern Ireland’s employment law is devolved, meaning the existing United Kingdom gender pay gap reporting requirements for employers with 250 employees or more do not extend to Northern Ireland.
In February 2025, the Department for Communities in Northern Ireland concluded a twelve-week public consultation on proposed requirements to report on differences in the pay of male and female employees, i.e., the gender pay gap.
The Employment Act (Northern Ireland) 2016 introduced the concept of gender pay gap reporting in Northern Ireland, in addition to ethnicity and disability pay gap reporting and the publication of pay gap action plans. However, for much of the three-year period from 2017 until 2020, the Northern Ireland Assembly was suspended following a breakdown in power-sharing, meaning the act was not brought into force.
The proposed regulations set out in the department’s consultation document would require organisations with 250 or more employees to report annually on their gender pay gap information. However, this employee threshold is currently under review. It is proposed that in their annual pay reports, employers would need to include the mean and median gender pay gap statistics using a “snapshot date” to lessen the effects of fluctuations in the workforce. This currently follows the definition from the Office for National Statistics used in England, Scotland, and Wales, which uses an annual snapshot date of April 5 and allows results to be directly comparable. The methodology and process of calculating the gender pay gap reports are also under review.
If the proposals are adopted, employers that identify a gap must publish an action plan detailing the steps they are taking to address the gender pay gap within their organisation. The department has outlined that it does not intend to set specific requirements for the content of action plans. Instead, the department encourages employers to develop plans that align with the scale of their gender pay gap. The department also said that these plans should address the contributing factors and outline the steps being taken to address the causes that fall within the employer’s control. Employers are required to provide the action plan to all employees and trade unions, if possible.
The department states that the aim of the proposed obligations is to:
identify gender pay gaps,
analyse the drivers behind them,
explore the extent to which an employer’s policies and practices may have contributed to the gaps, and
take remedial action.
In England, Scotland, and Wales, the UK government is currently consulting on whether to extend a similar reporting framework to gender pay gap reporting for ethnicity and disability reporting. Northern Ireland also seeks to impose similar obligations for ethnicity and disability reporting, although the details of these obligations have not been set out at this stage. It is likely that a reporting framework in Northern Ireland may operate slightly differently to take into consideration Northern Ireland’s existing mandatory employee monitoring obligation regarding community background.
What’s Next?
The consultation document indicates an intention to publish draft regulations as soon as possible, but the regulation is not expected to take effect before 2027. Employers may want to prepare for the required reporting obligations sooner and could consider undertaking some pay gap analysis work mirroring the existing obligations in England, Scotland, and Wales to identify whether there are any areas that require further scrutiny.
This consultation comes as part of a broader move towards requiring employers to be more transparent about pay and pay gaps. In the European Union, Directive (EU) 2023/970 (the EU Pay Transparency Directive) sets a high standard for pay transparency and pay gap reporting across the EU and is currently undergoing implementation by member states, with some countries such as the Republic of Ireland proposing to go beyond the directive’s minimum requirements.
Arizona’s New Heat Safety Executive Order: What to Know as Temperatures Rise
On May 22, 2025, Arizona Governor Katie Hobbs signed Executive Order (EO) 2025-09 as part of the state’s broader initiative to enhance worker safety amid rising summer temperatures. The Industrial Commission of Arizona’s (ICA) Division of Occupational Safety and Health (ADOSH) will establish a Workplace Heat Safety Task Force to draft and recommend heat safety guidelines for employers by the end of 2025. This task force will include members from the private sector, public sector, worker representatives, and occupational safety and health experts to create clear and effective guidance for managing heat risks.
Quick Hits
Arizona Governor Katie Hobbs recently signed Executive Order 2025-09 to enhance worker safety amid rising summer temperatures.
The Industrial Commission of Arizona’s Division of Occupational Safety and Health will establish a Workplace Heat Safety Task Force to draft guidelines by the end of 2025.
The new guidelines, set to be completed by December 31, 2025, will provide detailed, industry-specific recommendations for managing heat risks in the workplace.
Executive Order 2025-09 builds on Governor Hobbs’s Extreme Heat Preparedness Plan, launched in 2023, which aims to address the increasing temperatures in Arizona. ADOSH also implemented its heat State Emphasis Program (SEP), allowing inspectors to focus on heat-related injury and illness prevention, such as ensuring access to water, rest, and shade. Together, the preparedness plan, SEP, and EO position Arizona as an aggressive advocate against heat illness. In contrast, federal Occupational Safety and Health (OSHA) standards have only gone as far as to recognize heat as a safety hazard, but no specific guidelines have been implemented.
The task force’s guidelines, set to be completed by December 31, 2025, will clarify what constitutes a heat safety hazard under the Occupational Safety and Health (OSH) Act’s General Duty Clause. These guidelines will inform how ADOSH’s compliance safety and health officers (CSHO) enforce heat safety standards. While the specifics of the guidelines are still being developed, the task force will use heat data compiled for the SEP to go beyond basic recommendations like water, rest, acclimatization, and shade. The guidelines will offer detailed, industry-specific recommendations to help employers develop practical and effective heat safety plans.
Once completed, the guidelines will be recommended for approval by the ICA, with the intent to implement them by summer 2026. Therefore, the EO does not have an immediate impact on employers or their responsibilities under the OSH Act’s General Duty Clause. In the meantime, ADOSH CSHOs will continue to evaluate worksites for potential heat hazards during inspections, in line with the SEP. Employers may want to prepare to address heat-related hazards by developing safety programs, consistent with the recommendations set forth by the SEP, in advance of the implementation of the new guidelines. Employers can also sign up for email notifications to receive updates directly from ADOSH as the task force progresses.
Will the California Supreme Court Put the Heads Back on Headless PAGA Suits?
Since our last coverage of “headless PAGA lawsuits”—i.e., lawsuits in which a plaintiff disavows his individual PAGA claim and opts to pursue the claim only on behalf of others—significant developments have further complicated the Private Attorneys General Act (“PAGA”) landscape. In Leeper v. Shipt, Inc., 107 Cal.App.5th 1001 (2024), the California Court of Appeal (Second District) rejected the so-called “headless” PAGA theory and held that every PAGA action must include both an individual and a non-individual claim even if the plaintiff disavows their own claim, thereby preventing plaintiffs from using this strategy to avoid arbitration. A conflicting decision was issued by another appellate court (the Fourth District) in Rodriguez v. Packers Sanitation Servs. LTD., LLC, 109 Cal.App.5th 69 (2025), reh’g denied (Mar. 19, 2025). This disagreement between the two appellate decisions has led to considerable uncertainty for litigants facing pre-June 2024 PAGA lawsuits, with the California Supreme Court now stepping in to provide much needed guidance.
The Heart of the Dispute: PAGA “Individual” vs. “Non-Individual” Claims
The fundamental issue that the California Supreme Court will address in Leeper is whether a court can compel arbitration of individual PAGA claims (based on the pre-June 2024 version of the PAGA statute) when a plaintiff claims to assert only “non-individual” (i.e., representative-only) claims. Central to this question is whether Leeper or Rodriquez is controlling.
In Leeper v. Shipt, Inc., the appellate court held that every PAGA action necessarily includes both individual and non-individual components, with the individual component being arbitrable. The court in Leeper premised its decision on a plain reading of the PAGA statute, which expressly requires a plaintiff to bring their PAGA action “on behalf of himself or herself and other current or former employees.”[1] Once the individual claim is compelled to arbitration, per Leeper,the representative component is stayed pending the outcome of arbitration.
In Rodriguez v. Packers Sanitation Services LTD. LLC, the court conducted a very limited analysis of the issue. Rodriguez held that courts must look to the face of the complaint and if the lawsuit lacks individual PAGA allegations, the court is unable to order arbitration of claims not pled. While the court explicitly declined to answer whether a plaintiff may bring a PAGA action with only “non-individual” PAGA claims, it did note that a pleading lacking individual PAGA claims may be defective and subject to a motion to strike—suggesting, as Leeper held, that in order to bring a lawsuit seeking PAGA penalties, the named plaintiff must pursue both individual and non-individual claims. Rodriguez appears to be suggesting that defendants faced with a headless PAGA suit file simultaneous motions to compel arbitration and to strike defective pleadings.
The Current State: Deep Division and California Supreme Court Review[2]
The conflicting conclusions in Leeper and Rodriguez have deeply divided both the employment bar and the California appellate courts. Reflecting the significance of this division, on April 16, 2025, the California Supreme Court took the unusual step of ordering review of Leeper on its own motion.[3] The California Supreme Court noted that while Leeper remains under review, it may be cited for its persuasive value and to establish the existence of a conflict in authority, thereby allowing trial courts to exercise discretion in choosing between conflicting decisions. Subsequently, on May 14, 2025, the California Supreme Court granted review of Rodriguez, with further action deferred pending consideration and disposition of the related issues in Leeper.[4] As a result, Rodriguez currently has no binding or precedential effect and, like Leeper, may be cited only for its persuasive value and to establish the existence of a conflict in authority.[5]
Several appeals involving the headless PAGA issue raised in Leeper and Rodriguez are pending throughout the state and awaiting final word from the California Supreme Court.
Key Takeaways
For now, neither Leeper nor Rodriguez is binding authority, but both may be used as persuasive precedent or to demonstrate there is a conflict between the appellate courts on this issue. Plaintiffs who filed their notice with the Labor & Workforce Development Agency (“LWDA”) before June 19, 2024, and are attempting to bring a “headless” PAGA action in order to avoid arbitration, may theoretically invite motions to compel arbitration, motions to strike defective pleadings, or both, depending on which authority they cite to—potentially increasing complexity and costs of litigation for employers.
The ultimate resolution will come from the California Supreme Court, which is set to clarify whether all PAGA actions must necessarily include an individual component subject to arbitration. It remains to be seen whether in ruling on Leeper and Rodriquez, the Supreme Court will limit its findings to PAGA lawsuits based on a pre-June 2024 LWDA notice, or issue a broader decision that also addresses the post-June 2024 PAGA reforms (as previously reported in this blog post).
Given the continued uncertainty around PAGA litigation and arbitration agreements, employers should regularly review their employment arbitration agreements as we wait for the California Supreme Court to provide guidance on this issue.
FOOTNOTES
[1] Cal. Lab. Code § 2699(a) (emphasis added).
[2] All actions taken by the California Supreme Court on Leeper (S289305) and Rodriguez (S290182) can be monitored via the California Supreme Court Search Engine.
[3] Leeper v. Shipt, 566 P.3d 234 (Cal., 2025).
[4] Rodriguez v. Packers Sanitation Servs. Ltd., No. S290182, 2025 WL 1404550 (Cal. May 14, 2025).
[5] See Cal. Rules of Court, rules 8.1105, 8.1115, and Comment on rule 8.1115(e)(3).
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New Minneapolis Civil Rights Amendment Expands Risk for Employers
Last month, Minneapolis adopted several amendments to the city’s anti-discrimination ordinance substantially expanding the law’s protections, which will apply to Minneapolis employers effective Aug. 1, 2025. These amendments will apply to not only employers with operations located within Minneapolis, but also to any business that employs at least one person performing services within Minneapolis.
A. Amendments Reinforce State/Federal Protections
A portion of the amendments focused on mirroring state/federal law protections, such as the CROWN Act, which protects people from discrimination based on race-based physical traits (e.g., hair), and incorporates protections from the federal Pregnant Workers Fairness Act, which requires employers to provide pregnancy-related workplace accommodations.
B. Amendments Add New Categories
The amendments also added new protected categories, including:
height and weight,
housing status, and
“justice-impacted” status.
While relatively rare, a growing number of jurisdictions throughout the country (such as New York and San Francisco) have adopted similar appearance-based protections against height and weight discrimination for employees. In addition to numerical measurements of a person’s height or weight, Minneapolis’ ordinance also outlaws bias based on the “impression” an employer has of a person’s body size regardless of the numbers. The subjective aspect of the amended ordinance may make compliance with the prohibition against bias based on a person’s height and weight uniquely challenging for employers. However, the ordinance explicitly allows employers to assert as a defense to allegations of height or weight bias that the person’s body size prevents them from performing core job duties and no reasonable accommodation exists that wouldn’t unduly burden the business or pose a “direct threat” to health and safety.
“Justice-impacted” status is defined in the ordinance as “the state of having a criminal record or history,” including arrests, convictions, periods of incarceration or probation. Under current Minnesota state law, employers generally are barred from inquiring into or considering an applicant’s criminal record until they have been selected for an interview or, in the absence of an interview, a conditional job offer has been made.
The new amendment adds the requirement that adverse employment decisions, like a refusal to hire someone, must be “reasonably based on the relationship” between the conduct underlying a person’s criminal history and their ability and fitness to perform the job. To determine whether an adverse decision is reasonable based on that relationship, the amendment lays out these factors: if a person was convicted of an offense, how much time has passed since the alleged offense or conviction, the nature of the crime, a person’s age at the time of the offense, evidence of rehabilitation efforts that support the prospective employee, and “any unreasonable risk” to specific people, property or the general public. The amendment precludes employers from making an adverse employment decision based on an arrest which did not result in a conviction, unless charges stemming from the arrest are still pending.
The amended ordinance has an exception for situations where refusal to hire is necessary to comply with state or federal laws or regulations.
The amendments also add housing status as a protected class, which is defined as those who may or may not have “a fixed, regular, and adequate nighttime residence.” Except as required or authorized by federal or state law, regulation, rule or government contract, it will be unlawful for an employer to refuse to hire or terminate an applicant or employee based on their housing status unless such action is because of a legitimate business justification not otherwise prohibited by law.
C. Amendments Expand the Definition of Disability
The amendments also changed basis on which an individual is considered disabled for purposes of the law’s prohibition of disability discrimination. Previously, the definition of a person with a disability in the Minneapolis ordinance mirrored the federal ADA standard—i.e., was someone who has a “physical, sensory or mental impairment” that “materially limits” at least one major life activity, had a record of such an impairment, or is perceived to have such an impairment. Now, though, it will include impairments which are “episodic or in remission” and “would materially limit a major life activity when active.”
D. Practical Advice for Employers Affected
In sum, these amendments greatly expand the risk of claims of discrimination against businesses within Minneapolis or with employees performing services in Minneapolis. These businesses face charges filed with the Minneapolis Commission on Civil Rights, which has the authority to order broad relief, including hiring, reinstatement, and backpay. Given these changes, it is imperative that businesses within or with employees performing services in Minneapolis review their policies and internal procedures to ensure they are compliant with the new requirements.
Trump Administration Proposes Elimination of OFCCP, Launches New Opinion Letter Program for Labor Guidance
The Trump administration plans to completely eliminate the Office of Federal Contract Compliance Programs (OFCCP) and transfer the agency’s remaining authority to enforce protections in federal contractors for veterans and workers with disabilities to other agencies, according to the U.S. Department of Labor’s (DOL) recent budget document. Meanwhile, the DOL has announced the launch of its “opinion letter program” that could provide employers with additional guidance on the administration’s revamp of the department and new enforcement priorities.
Quick Hits
The Trump administration’s budget proposal seeks to eliminate the OFCCP and transfer enforcement responsibilities for veterans and disability protections to other agencies.
Amid the administration’s new labor policies, the DOL has launched an opinion letter program to provide clear guidance on federal labor laws to employers and workers.
On May 30, 2025, the DOL released its budget justification for the fiscal year (FY) 2026 federal budget, in which the department proposed to “eliminate” the OFCCP. The agency had been tasked with enforcing antidiscrimination compliance and affirmative action program obligations in federal contracting, but recent executive orders have limited its authority.
In the budget justification, the DOL indicated it would transfer OFCCP’s enforcement of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) to the Veterans’ Employment and Training Service (VETS), and enforcement of Section 503 of the Rehabilitation Act of 1973 would be transferred to the U.S. Equal Employment Opportunity Commission (EEOC).
Accordingly, the DOL is not seeking any budget funding for OFCCP but is requesting a $7 million increase for the VETS. The budget document explains the DOL’s proposed budget request and outlines the agency’s policy priorities. The U.S. Congress must approve the final budget.
In its own budget justification, the EEOC said it “is the most appropriate entity to assume … responsibilities” for enforcement of Section 503 and said its FY 2026 request “includes funding for the EEOC to support this expansion of the agency’s disability anti-discrimination program.” Still, overall, the EEOC is requesting nearly $20 million less in funding as compared to the prior fiscal year.
The proposals come after President Donald Trump’s executive order (EO) 14173 revoked EO 11246, which had prohibited employment discrimination by federal contractors and mandated affirmative action programs for women and minorities. EO 14173 further seeks to eliminate employers’ “illegal” diversity, equity, and inclusion (DEI), more broadly.
EO 14173 stripped the OFCCP of much of its enforcement authority, making the agency’s future uncertain. Currently, the OFCCP retains responsibility for enforcing federal contracting nondiscrimination and affirmative action obligations for veterans and workers with disabilities under VEVRAA and Section 503. However, the acting secretary of labor had ordered OFCCP to hold all VEVRAA and Section 503 compliance evaluations in abeyance and shortly thereafter OFCCP issued updated notices to many covered contractors with active evaluations.
In April 2025, the Trump administration placed the majority of OFCCP staff on administrative leave after offering deferred resignation and voluntary early retirement options. However, that reduction in force was temporarily paused by a federal court ruling in California, which was later upheld by the U.S. Court of Appeals for the Ninth Circuit. The Trump administration has reportedly asked the Supreme Court of the United States to address the issue.
DOL Opinion Letters
On June 2, 2025, the DOL announced the launch of its opinion letter program to provide employers and workers with official interpretations of federal labor laws. The program’s goal is to “promote clarity, consistency, and transparency in the application of federal labor standards.”
The documents will be published by five enforcement agencies within the DOL: the Wage and Hour Division, the Occupational Safety and Health Administration (OSHA), the Employee Benefits Security Administration (EBSA), VETS, and the Mine Safety and Health Administration (MSHA).
“Opinion letters are an important tool in ensuring workers and businesses alike have access to clear, practical guidance,” Deputy Secretary of Labor Keith Sonderling said in a statement. “Launching this program is part of our broader effort to empower the public with the information they need to understand and comply with the laws the department enforces.”
Anyone can submit an opinion letter request to the DOL, although most are requested by employers seeking clarity on situations that are not addressed in statutes or regulations. DOL opinion letters are published allowing all to benefit from the guidance provided.
Next Steps
The Trump administration’s budget proposal suggests that the OFCCP’s days are numbered. However, federal contractors and other employers continue to have obligations under federal antidiscrimination laws, notably Title VII of the Civil Rights Act of 1964, as well as local and state antidiscrimination laws. Federal contractors and federal money recipients also now are faced with the new obligations imposed by EO 14173 including certifications under False Claims Act liability that they do not promote unlawful DEI and comply with all federal anti-discrimination laws.
The administration’s shifting enforcement priorities and interpretation of federal equal employment opportunity and/or antidiscrimination laws make the new DOL opinion letter program more pertinent. We anticipate that DOL will publish more opinion letters in this administration.
Supreme Court Reverses Lower Court Order Pausing Termination of CHNV Parole Program
On May 30, 2025, the Supreme Court of the United States issued an order granting the Trump administration’s application to stay a lower court order temporarily halting the rescission of the Cuba, Haiti, Nicaragua, and Venezuela (CHNV) parole program. This order allows the administration to resume implementation of this rescission while court challenges continue through the appeals process.
Quick Hits
On May 30, 2025, the Supreme Court granted the Trump administration’s request to stay a lower court order that had temporarily halted the rescission of the Cuba, Haiti, Nicaragua, and Venezuela (CHNV) parole program, allowing the administration to resume its implementation.
The Supreme Court’s decision reinstates DHS’s initial notice, potentially invalidating employment authorization documents (EADs) under the CHNV parole program, regardless of their listed expiration dates.
Employers may need to identify and reverify the employment authorization of impacted employees due to the revocation of the CHNV parole program.
Background
Section 212(d)(5)(A) of the Immigration and Nationality Act authorizes the secretary of homeland security, at the secretary’s discretion, to “parole into the United States temporarily under such conditions as he [or she] may prescribe only on a case-by-case basis for urgent humanitarian reasons or significant public benefit any alien applying for admission to the United States.” Parole allows noncitizens who may otherwise be inadmissible to enter the United States for a temporary period and for a specific purpose.
The Biden administration implemented a temporary parole program for Venezuelans in October 2022, and later expanded the parole program to include Cubans, Haitians, and Nicaraguan nationals in January 2023. Individuals within this program may apply for an Employment Authorization Document (EAD) in the (c)(11) category. The Biden administration announced in October 2024 that it would not extend legal status for individuals who were permitted to enter the United States under the CHNV parole program but encouraged CHNV beneficiaries to seek alternative immigration options.
On March 20, 2025, the U.S. Department of Homeland Security (DHS) published a Federal Register notice announcing the immediate termination of the CHNV parole program. The termination was set to take effect within thirty days of the date of publication of the notice, or April 24, 2025. On April 14, 2025, U.S. District Court Judge Indira Talwani issued a nationwide order staying or temporarily suspending the implementation of this categorical termination of the CHNV parole program. On May 5, 2025, the First Circuit Court of Appeals denied the Trump administration’s request for a stay of Judge Talwani’s ruling. The administration promptly appealed to the Supreme Court.
Analysis and Impact
The Supreme Court’s order reverses the lower court’s temporary pause on the rescission of CHNV parole but does not address the rescission’s merits. Nevertheless, DHS may now proceed with its revocation of CHNV parole as litigation on the merits continues.
The Court’s decision effectively reinstates DHS’s initial Federal Register notice, which in part states that any employment authorization derived through the CHNV parole program was scheduled to terminate on April 24, 2025. Persons with employment authorization documents (EADs) in the (c)(11) category under the CHNV program may no longer have valid work authorization, regardless of the expiration date listed on the EAD itself.
We expect DHS to provide further clarity as to how it intends to proceed with implementing revocation of CHNV parole and how employers should proceed, but based on DHS’s guidance prior to the district court’s initial hold, employers may be required to identify impacted employees and reverify employment authorization.
Identifying which employees are impacted by this change can be challenging, since the public interest parolee EAD category code (c)(11) is typically not entered in the I-9 form or other personnel records.
Oregon SB 951, Regulating the Corporate Practice of Medicine, Awaits Governor’s Signature
SB 951, which bolsters existing Oregon law prohibiting the corporate practice of medicine (CPOM), passed the state House of Representatives on May 28 and now awaits the signature of Governor Tina Kotek.
As EBG noted in a recent blog, the majority of states have some form of CPOM restriction. Oregon’s doctrine stretches back to 1947, when the state supreme court in State ex. rel. Sisemore v. Standard Optical Co. of Or. banned corporations from owning medical practices, practicing medicine, or employing physicians.[1]
Since then, however, Oregon has sought to strengthen its CPOM rules legislatively, as entities have “sought to circumvent the ban through complex ownership structures, contracting practices, and other means,” as SB 951 states.
The bill is designed to disrupt historically accepted CPOM structures by banning certain arrangements that are inherent to Friendly PC models and placing limitations on Management Service Organizations (MSOs). The sponsors of SB 951 claim the bill is said to close loopholes where private equity firms, management companies, and/or corporations employ or contract with physicians who are listed as owners but do not necessarily control the practice—helping to ensure that physicians retain authority over clinical decision making. SB 951 thus aims to
Restrict the control of MSOs over the clinical and operating decisions of physician-owned practices;
Prevents dual employment arrangements where MSOs employ physicians to bypass a CPOM ban; and
SB 951 also limits noncompetition, nondisclosure, and nondisparagement agreements.
The Restrictions
Section 1. The bill prohibits MSOs—defined as those providing management services to a professional medical entity, under a written agreement and in return for monetary compensation—or MSO shareholders, directors, members, managers, officers, or employees from
Owning or controlling a majority of shares in a professional medical entity with which the MSO has a contract;
Serving as directors, officers, employees, independent contractors of (or otherwise receiving compensation from) the MSO, in order to manage or direct the management of a professional medical entity with which the MSO has a contract;
Exercising control or entering into an agreement to control or restrict the sale or transfer of a professional medical entity’s shares or cause a professional medical entity to issue shares of a professional medical entity; and
Exercising de facto control over administrative, business, or clinical operations of a professional medical entity in a manner that affects the entity’s clinical decision making or the nature or quality of care that the entity delivers. Includes hiring and terminating, setting work schedules or compensation for, specifying terms of employment of medical licensees; setting clinical staffing levels, making diagnostic coding decisions, and more.
Bullet number two is one of the most significant restrictions contained in SB 951 because it severely limits the overlapping ownership and control between the MSO and the professional medical entity, a key characteristic of Friendly PC models that ensure alignment between the MSO and the professional medical entity. Bullet number three is also a major restriction because, subject to some limited exceptions, it essentially prohibits stock transfer restriction agreements between a MSO and an owner of a professional medical entity, another common feature of the Friendly PC model.
An MSO is not prohibited from:
Providing services that do not constitute an exercise of de facto control over administrative, business, or clinical operations of a professional medical entity in a manner that affects the entity’s clinical decision making or the nature or quality of care that the entity delivers;
Purchasing, leasing, or taking an assignment of a right to possess the assets of a professional medical entity in an arms-length transaction with a willing seller, lessor, or assignor;
Providing support, advice and consultation on all matters related to a professional medical entity’s business operations.
Exceptions. SB 951 has been criticized for creating “numerous carveouts” that discourage competition and investment by mandating who may participate in the health care market and who may not.
“Exempt providers include: Hospitals, behavioral health facilities, PACE organizations, crisis lines, tribal health programs, care facilities, and independent practice organizations. These are all exempt…continuing business as usual while independent providers face burdensome regulations,” Rep. Ed Diehl of the Oregon House of Representatives wrote in testimony. ”If this is such a good idea, why exempt these organizations?”
These prohibitions do not apply, for example, to an individual who provides medical services or health care services for or on behalf of a professional medical entity if the individual
Does not own or control more than 10 percent of the total shares of or interest in the professional medical entity;
Is not a shareholder in or a director, member, manager, officer, or employee of an MSO; and
Is compensated at the market rate for the medical services or health care services and the individual’s employment and services regarding the MSO are entirely consistent with the individual’s professional obligations, ethics and duties to the professional medical entity and the individual’s patients.
As noted above by critics, the exemptions include
An individual owning shares or an interest in a professional medical entity and an MSO with which the professional medical entity has a contract for services, under certain conditions;
A professional medical entity and the shareholders, directors, members, managers, officers, or employees of the professional medical entity; under certain conditions;
A physician who is a shareholder, director, or other officer of a professional medical entity and who also serves as a director or officer of a MSO with which the professional medical entity has a contract for management services, under certain conditions, including if the professional medical entity contracting with the MSO is solely and exclusively, for example; a hospital or hospital-affiliated clinic; long-term care facility; residential care facility; PACE organization; behavioral health care provider; mental health or substance abuse disorder crisis line provider; and more.
Telemedicine or coordinated care organizations, under certain conditions.
Sections 2 and 3. With exceptions, these sections amend ORS 58.375 and 58.376 to restrict how a professional corporation (PC)—i.e., a corporation organized for the purpose of practicing medicine/rendering professional health care services—may remove directors or officers, or how it may relinquish or transfer control over the PC’s administrative, business, or clinical operations. PCs may remove a director or officer by means other than a majority vote of shareholders if the director violated a duty of care, was the subject of a disciplinary proceeding, engaged in fraud, etc.
Section 5. SB 951 provides that all officers of a PC, except the secretary and treasurer, must be naturopathic physicians who must hold a majority of each class of shares of the professional corporation that is entitled to vote and be a majority of directors of the professional corporation. An employee or person who holds an interest in the professional corporation may not direct or control the professional judgment of a naturopathic physician who is practicing within the professional corporation.
Section 7. This voids 1) noncompetition agreements that restrict the practice of medicine or nursing, under certain conditions; and 2) nondisclosure or nondisparagement agreements between medical licensees and MSOs, hospitals, and/or hospital-affiliated clinics, under certain conditions.
Takeaways
Contracts or other agreements between MSOs and professional medical entities or medical licensees that violates the provisions of SB 951 may be void and unenforceable; too, MSOs may face an action by a medical licensee or professional medical entity suffering a loss of money or property.
If SB 951 is signed into law by Governor Kotek it will take effect immediately, with the following caveats:
Section 1 first applies on January 1, 2026, to 1) MSOs and professional medical entities incorporated or organized in the state on or after the effective date of the legislation; and 2) sales and or transfers of ownership or membership interests in such MSOs or professional medical entities occurring on or after the effective date of the legislation.
Section 1 first applies on January 1, 2029, to 1) MSOs and professional medical entities existing before the effective date of the act and to 2) sales or transfers of ownership or membership interests in such MSOs or professional medical entities that occur on or after January 1, 2029.
Sections 5, 7, and 8 and amendments to ORS 58.375 and 58.376 apply to contracts entered into or renewed on or after the effective date of the legislation.
We do expect litigation regarding this bill and will keep you updated on further developments.
Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.
ENDNOTES
[1] 182 Or. 452 (1947).
Oklahoma Expands its Security Breach Notification Law
The Oklahoma State Legislature recently enacted Senate Bill 626, amending its Security Breach Notification Act, effective January 1, 2026, to address gaps in the state’s current cybersecurity framework (the “Amendment”). The Amendment includes new definitions, mandates reporting to the state Attorney General, clarifies compliance with similar laws, and provides revised penalty provisions, including affirmative defenses.
Definitions
The Amendment provides clearer definitions related to security breaches, specifying what constitutes “personal information” and “reasonable safeguards.”
Personal Information: The existing definition for “Personal Information” was expanded to also include (1) a unique electronic identifier or routing code in combination with any required security code, access code, or password that would permit access to an individual’s financial account and (2) unique biometric data such as a fingerprint, retina or iris image, or other unique physical or digital representation of biometric data to authenticate a specific individual.
Reasonable Safeguards: The Amendment provides an affirmative defense in a civil action under the law for individuals or entities that have “Reasonable safeguards” in place, which are defined as “policies and practices that ensure personal information is secure, taking into consideration an entity’s size and the type and amount of personal information. The term includes, but is not limited to, conducting risk assessments, implementing technical and physical layered defenses, employee training on handling personal information, and establishing an incident response plan”.
Mandated Reporting and Exceptions
In the new year, entities required to provide notice to impacted individuals under the law in case of a breach will also be required to notify the Attorney General. The notification must include specific details including, but not limited to, the type of personal information impacted the nature of the breach, the number of impacted individuals, the estimated monetary impact of the breach to the extent such can be determined, and any reasonable safeguards the entity employs. The notification to the Attorney General must occur no more than 60 days after notifying affected residents.
However, breaches affecting fewer than 500 residents, or fewer than 1,000 residents in the case of credit bureaus, are exempt from the requirement to notify the Attorney General.
In addition, an exception from individual notification is provided for entities that comply with notification requirements under the Oklahoma Hospital Cybersecurity Protection Act of 2023 or the Health Insurance Portability and Accountability Act of 1996 (HIPAA) if such entities provide the requisite notice to the Attorney General.
What Entities Should Do Now
Inventory data. Conduct an inventory to determine what personal information is collected given the newly covered data elements.
Review and update policies and practices. Reevaluate and update current information security policies and procedures to ensure proper reasonable safeguards are in place. Moreover, to ensure that an entity’s policies and procedures remain reasonably designed, they should be periodically reviewed and updated.
Sun’s Out, Funds Up: California’s Local Minimum Wage Increases in July
At the start of the year, the state minimum wage increased, along with several local jurisdictions. Many other California cities and counties also raise their minimum wage on July 1.
The following localities will raise their minimum wage on July 1, 2025:
Locality
CurrentMinimum Wage
New Minimum wage
Alameda
$17.00
$17.46
Berkeley
$18.67
$19.18
Emeryville
$19.36
$19.90
Fremont
$17.30
$17.75
City of Los Angeles
$17.28
$17.87
County of Los Angeles (unincorporated areas only)
$17.27
$17.81
Milpitas
$17.70
$18.20
Pasadena
$17.50
$18.04
San Francisco
$18.67
$19.18
Santa Monica
$17.27
$17.81
West Hollywood
$19.61
$19.65
These minimum wages do not reflect some local industry-specific minimum wage requirements such as those recently amended in the City of Los Angeles.
UK Government Announces Proposals for Reforming Immigration System
On 12 May 2025, the UK government published the white paper, “Restoring Control over the Immigration System,” which proposes several significant changes to UK immigration policy aimed at reducing net migration and tightening immigration controls.
Quick Hits
The UK government has published a white paper which proposes significant changes to the immigration rules, including a 32 percent increase in the Immigration Skills Charge.
The proposed changes include extending the qualifying period for Indefinite Leave to Remain under the Skilled Worker route from five to ten years and raising the minimum skill level to RQF Level 6.
The Graduate visa period is proposed to be reduced from two years to eighteen months, prompting employers to consider switching Graduate visa holders to the Skilled Worker route to avoid higher fees.
Prime Minister Keir Starmer announced the proposed changes in response to record-high migration levels, with net migration having quadrupled in 2023.
The proposed changes are not immediate and will need to be assessed and debated in Parliament before any changes come into effect. In this article, we summarize the key proposed changes specifically in relation to the Skilled Worker and the Graduate visa routes.
Increased Immigration Skills Charge
The Immigration Skills Charge (ISC) is proposed to increase by 32 percent in line with inflation. This will be the first time the ISC fee has been increased since its introduction in 2017.
For small sponsors, this would increase from £364 to £480 per year. For medium/large sponsors, this would increase from £1,000 to £1,320 per year.
Qualifying Period for Indefinite Leave to Remain
Under the current rules, those under the Skilled Worker route can apply for indefinite leave/settlement after five years’ continuous residence in the UK, subject to meeting the requirements. The proposal looks to extend this to ten years, though there may be an opportunity to reduce the qualifying period based on unspecified “Points-Based contributions to the UK economy and society.” At this stage, it is not clear what this entails, and further details should be issued in due course.
The white paper does not provide a detailed roadmap for handling transitional cases, and it is not yet clear whether those who have already started their five-year Indefinite Leave to Remain (ILR) journey will be exempt from the new ten-year requirement.
Skilled Worker Route
Raising the Skill Level
The proposal aims to raise the minimum skill level for Skilled Worker roles to RQF Level 6 (i.e., graduate level).
Under the current rules, Skilled Worker roles can be sponsored at RQF Level 3 (i.e., A-level equivalent). The skill level was lowered by the UK government in 2020 which led to a large increase in work visas and concerns with an overreliance on international recruitment, rather than sourcing talent from within the United Kingdom. The increase aims to address the government’s “concerns about exploitation of overseas recruits.”
The paper confirms the raised threshold will apply to new Skilled Worker applicants. Existing Skilled Worker visa holders can continue to extend their visa, change employment, and take supplementary employment in currently eligible occupations below RQF 6.
Raising the Salary Threshold
The proposal confirms the salary thresholds under the Skilled Worker route will increase. Details have not been provided yet on the new thresholds.
Abolishing the Immigration Salary List
The Immigration Salary List, which provides a salary discount to eligible occupation codes, will be abolished. The government has asked the Migration Advisory Committee (MAC) to review the current salary requirements and discounts to ensure salary thresholds reflect the new changes to the immigration system.
English Language Requirement
The following changes are proposed for the English language requirement:
For main applicants under the Skilled Worker route, the minimum English proficiency level will increase from B1 (intermediate) to B2 (upper-intermediate).
The English language requirement will extend to adult dependants at a reduced level. They will need to meet a minimum of A1 (basic user) level and will be required to show progression for visa extensions (to A2 level) and settlement (to B2 level). Under the current rules, dependants are not required to meet the English language requirement.
Graduate Visa Holders
It is proposed that the Graduate visa period will be reduced from two years to eighteen months.
Given the proposed fee increase and salary threshold changes to the Skilled Worker route, employers may wish to consider switching those on a Graduate visa to the Skilled Worker route as soon as possible to avoid paying higher application fees which could be implemented this year.
Next Steps
At present, there is little detail on the proposed changes. In light of the recent proposals, particularly those affecting the Skilled Worker route, employers may wish to consider the following practical steps:
Reviewing workforce needs: Consider conducting an internal audit and aim to identify roles that are currently filled or may be filled by Skilled Worker visa holders. An assessment may be made on how the proposed reforms (e.g., higher English language and skill levels) could affect future recruitment needs.
Having clear lines of communication with existing Skilled Worker visa holders: Consider assessing the potential impact on current sponsored workers and provide reassurance regarding the actions they plan to take to mitigate any negative effects if the proposals are implemented.
Reviewing current recruitment strategies: Where practicable, consider expediting the recruitment and sponsorship of Skilled Workers before the increased fees take effect.
Reviewing recruitment budgets: Consider preparing for the potential increase in visa application fees and overall costs associated with sponsoring Skilled Workers.