AIPLA Conference on Trade Secret Litigation Recap: Part 1
At the recent AIPLA Trade Secret Summit, one of the nation’s premier conferences on trade secret law, critical issues surrounding the protection of confidential business information took center stage. The discussions reinforced the importance of safeguarding trade secrets and proprietary data against theft, liability, and employee mismanagement—particularly during key employment transitions such as hiring, active employment, and separation. These considerations are essential for companies striving to maintain their competitive edge while navigating complex legal and ethical challenges.
Hearing firsthand how companies handle these issues reinforced just how vital it is to stay proactive and ahead of the curve. Our team has put together a series of key take aways from the event that may help companies to guard against unfair competition and trade secret theft. Our first topic for consideration is joint representation.
Joint Representation
Representing an onboarding employee and the company concerning the hiring of the individual can be a tricky proposition. There are good reasons for engaging in a joint representation with proper warnings and there are definite pitfalls.
One of those pitfalls is the appearance that the new employee and the new employer are joined at the hip relating to the conduct of the employee exiting a former employer (especially if the former employer is a direct competitor). When this situation occurs, the first step is to review the representation from an ethical standpoint under existing Ethics and Professionalism rules.
It is considered ethical to simultaneously represent multiple clients whose interests may not ultimately be aligned if the law does not prohibit the representation and if no client asserts a claim against any other client involved in the proceeding.
First things first—obtain an acknowledgement from the new employee that there is no restrictive covenant impeding the employment, the employee has exited his former company without any trade secret/confidential/proprietary information, and the employee has not destroyed or spoliated any information that belongs to the former employer.
If these factors check out, proceed cautiously with the caveat that if it is learned that the acknowledgement is false, representation of the employee will end and representation of the company will continue. In this type of situation, informing each party of the risks of dual representation is key to continued representation of the company when bad facts present themselves. This is not to say that disqualification may still occur, particularly if privileged information obtained from the onboarding employee could assist the employer in defending any claims.
A key case to review before undertaking any dual representation is Upjohn v U.S, 449 U.S. 383 ( 1981).
DoD Workforce Transformation and Strategic Implications for Defense Contractors
The Department of Defense has initiated a far-reaching transformation of its civilian workforce through the Workforce Acceleration and Recapitalization Initiative, formalized in the Deputy Secretary of Defense memorandum “Guiding Principles for The Department of Defense Workforce Optimization.” This comprehensive restructuring represents the most significant overhaul of DoD civilian personnel in decades, aiming to create a leaner, more agile organization exclusively focused on mission-critical functions that enhance national security capabilities. The initiative signals a fundamental shift in how the Pentagon operates, moving away from decades of organizational expansion toward a more focused, technologically advanced defense establishment.
Strategic Pillars of the Initiative
The DoD’s transformation is built upon four interconnected strategic pillars designed to fundamentally reshape its civilian workforce structure and operations. The first pillar, mission-centric realignment, requires all civilian positions to demonstrate direct contribution to core defense priorities including combat readiness, strategic deterrence, and operational effectiveness. This represents a significant departure from previous approaches that often allowed support functions to expand without clear connections to mission outcomes. Under this new framework, positions will undergo rigorous evaluation against mission-critical thresholds, with those failing to demonstrate direct impact facing potential consolidation, reclassification, or elimination. This realignment will enable the DoD to shift personnel and funding toward high-priority defense capabilities that directly enhance America’s military advantage, particularly in contested domains like cyber, space, and advanced weapons systems.
The second pillar focuses on organizational streamlining to eliminate the bureaucratic layering that has accumulated over decades. Parallel functions across components will be consolidated to reduce redundancies that have historically slowed decision-making and diluted accountability. This consolidation aims to accelerate decision velocity throughout the organization—a critical capability in an era of great power competition where operational tempo continues to increase. Enhanced fiscal discipline represents another key benefit, as consolidated operations will maximize resource utilization and effectiveness, potentially freeing billions for modernization priorities rather than administrative overhead. The DoD estimates that eliminating duplicative functions could reduce administrative costs by up to 15% while simultaneously improving service delivery.
Technological modernization forms the third pillar, with the DoD implementing a Digital-First operational approach across all appropriate functions. This goes beyond simple automation to encompass comprehensive digital transformation, including advanced AI solutions for tasks ranging from maintenance scheduling to personnel management. Legacy systems that have hindered interoperability and operational effectiveness will be systematically phased out and replaced with integrated platforms capable of supporting multi-domain operations. This digital transformation will enable enhanced analytics capabilities to support evidence-based resource allocation, allowing the DoD to make data-driven decisions about where to invest limited resources for maximum strategic impact. The initiative specifically targets a 30% reduction in manual processes by FY2026.
The final pillar involves strategic outsourcing based on a comprehensive reassessment of which activities genuinely require government performance versus those better suited for contractor delivery. This represents a nuanced approach rather than wholesale privatization, focusing particularly on non-inherently governmental functions in retail, recreational services, and certain administrative areas. The DoD is developing sophisticated frameworks to determine optimal service delivery models, considering factors beyond immediate cost savings to include mission alignment, performance quality, and strategic flexibility. This approach creates significant opportunities for contractors who can demonstrate superior capability, efficiency, and innovation in delivering these services.
Implementation Roadmap
The DoD has established a structured, multi-phase implementation approach to ensure systematic transformation while maintaining operational continuity. The assessment phase, which concluded with initial organizational review submissions due April 11, 2025, and required components to conduct preliminary evaluations of their organizational structures and workforce compositions. This phase established baseline metrics and identified immediate opportunities for consolidation or elimination of redundant functions. The current detailed planning phase, culminating in comprehensive implementation plans due May 24, 2025, requires components to develop specific restructuring roadmaps, including position-by-position analyses, technology implementation strategies, and contractor transition plans where applicable.
The execution phase will extend throughout FY2025-2026, with a carefully sequenced implementation approach designed to minimize operational disruption while achieving transformation objectives. The workforce impact is projected to reduce civilian positions by 5-8% (approximately 60,000 positions), implemented through a combination of hiring freezes, voluntary separation incentives, and targeted reductions in low-priority areas. This represents the most significant DoD workforce reduction since the post-Cold War drawdown. Recognizing the risk of losing critical talent during this transition, the DoD has developed a sophisticated talent retention strategy emphasizing enhanced performance-based incentives to retain high-performing personnel in mission-critical roles. This includes expanded use of retention bonuses, accelerated promotion pathways, and specialized training opportunities for personnel in priority capability areas.
Implications for Defense Contractors
The DoD’s transformation creates a rapidly evolving landscape that presents both significant opportunities and potential challenges for defense contractors across all sectors. In terms of emerging opportunities, the initiative will drive heightened demand for contractors offering AI, automation, and digital workflow solutions that directly support the DoD’s technological modernization objectives. Companies with proven capabilities in areas like predictive analytics, process automation, and secure cloud implementation will find expanding markets as components seek to accelerate their digital transformation. The increased outsourcing of previously government-performed functions will expand managed service opportunities, particularly in areas like logistics, facilities management, and certain administrative functions where private sector efficiency and innovation can deliver superior outcomes at lower costs.
Advisory services represent another growth area, with increasing need for expertise in change management, organizational transformation, and performance optimization as DoD components navigate complex restructuring processes. Contractors with demonstrated experience in large-scale organizational transformation, particularly those with relevant public sector experience, will be well-positioned to capture this growing demand. Additionally, as the DoD shifts remaining personnel toward higher-value functions, training and development requirements will expand, creating opportunities for contractors offering specialized technical training, leadership development, and certification programs aligned with the DoD’s evolving capability needs.
To effectively capitalize on these opportunities, contractors should consider several market positioning strategies. First and foremost, they must recalibrate their offerings to directly support the DoD’s core operational priorities, emphasizing how their products and services enhance lethality, readiness, and strategic advantage rather than simply providing administrative support. This requires a sophisticated understanding of the DoD’s mission requirements and capability gaps, along with the ability to articulate clear, compelling value propositions in terms that resonate with defense decision-makers focused on mission outcomes.
Contractors should also position their service offerings as enablers of the DoD’s digital transformation goals, demonstrating how their solutions can accelerate the transition from manual, paper-based processes to integrated digital workflows that enhance efficiency and effectiveness. Proposals should emphasize cost-effectiveness and operational improvements, providing quantifiable metrics that demonstrate how contractor solutions deliver superior value compared to status quo approaches or competing alternatives. With the DoD likely to consolidate contract vehicles as part of its efficiency initiatives, contractors should prepare for potential bundling of previously separate contracts, potentially necessitating new teaming arrangements or capability expansions to remain competitive in this evolving procurement environment.
Risk mitigation represents another critical consideration for contractors navigating this transformation. Portfolio diversification should be a priority, reducing exposure to contracts supporting non-essential functions that may face elimination or significant reduction. Contractors should conduct comprehensive reviews of existing agreements to assess vulnerability to consolidation or elimination, developing contingency plans for at-risk contracts while identifying opportunities to expand in growth areas. Relationship management becomes increasingly important in this environment, with contractors needing to strengthen engagement with program offices likely to gain importance in the reorganization while developing relationships with emerging decision-makers in priority capability areas.
Finally, contractors should develop agile delivery models with flexible staffing and delivery approaches to accommodate the DoD’s evolving needs. This includes the ability to rapidly scale services up or down as requirements change, provide hybrid on-site/remote delivery options, and integrate seamlessly with government and other contractor teams in increasingly complex delivery ecosystems. Contractors who demonstrate this agility and responsiveness will have significant advantages in capturing new opportunities while maintaining existing business relationships through the transformation period.
Strategic Outlook
The DoD’s workforce transformation represents a fundamental shift in how the Department structures its workforce and delivers on its mission. Rather than a simple cost-reduction exercise, it reflects a strategic realignment aimed at creating a more lethal, responsive, and technologically advanced defense establishment capable of prevailing in increasingly complex and contested operational environments. This transformation will reshape the defense contracting landscape for years to come, creating new opportunities for innovative, mission-focused companies while challenging traditional business models and relationships.
Contractors who proactively align with this vision—emphasizing mission impact, digital capabilities, and operational efficiency—will find significant opportunities in this evolving landscape. Those who continue with business-as-usual approaches may face increasing challenges as the DoD reshapes its contractor relationships to match its new organizational reality. The most successful contractors will be those who position themselves as strategic partners in the transformation journey, offering solutions that directly advance the DoD’s core objectives while demonstrating exceptional value and performance. As this initiative unfolds over the coming years, it will fundamentally reshape the relationship between the Department and its industrial base, creating a more integrated, efficient, and effective defense enterprise capable of meeting the complex security challenges of the 21st century.
The Performance Review- Arbitration Agreements – What, Why, and How [Podcast]
GT Shareholders Brian Kelly and Michael Wertheim discuss changes in California’s employment arbitration landscape and its integration with federal law. (Plus, would Col. Nathan Jessup’s famous courtroom soliloquy have the same impact bouncing off the four corners of a conference room at an arbitration proceeding?)
GT’s The Performance Review – California Labor & Employment Podcast is a discussion on the latest trends and developments in California Labor & Employment law.
Navigating the Rise of Accommodation Requests in Life Sciences [Podcast]
Accommodation requests are evolving, and life sciences employers are witnessing a surge in diverse and creative requests.
EEOC Submits Request to Eliminate Optional Disclosure of Non-Binary Data for EEO-1 Reporting
On April 15, 2025, in response to Executive Order 14168, Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, the EEOC filed an Information Collection Request (ICR) with OMB requesting what it classified as a non-substantive change to remove the option for employers to voluntarily report non-binary data for those in their workforce.
In past years, the EEO-1 reporting instructions allowed respondents to provide non-binary data in a narrative form in the comment box of the report. EEOC believes this voluntary option must be removed to comply with Executive Order 14168.
The data collection for 2024 has not yet opened but this may be an indication the Agency is preparing to do so at some point in the near future. Additionally, the ICR is not seeking any changes beyond the current data collection approval period which runs through 2026.
Q1 2025 New York Artificial Intelligence Developments: What Employers Should Know About Proposed and Passed Artificial Intelligence Legislation
In the first part of 2025, New York joined other states, such as Colorado, Connecticut, New Jersey, and Texas,1 seeking to regulate artificial intelligence (AI) at the state level. Specifically, on 8 January 2025, bills focused on the use of AI decision-making tools were introduced in both the New York Senate and State Assembly. As discussed further below, the New York AI Act Bill S011692 (the NY AI Act) focuses on addressing algorithmic discrimination by regulating and restricting the use of certain AI systems, including in employment. The NY AI Act would allow for a right of private action, empowering citizens to bring lawsuits against technology companies. Additionally, the New York AI Consumer Protection Act Bill A007683 (the Protection Act) would amend the general business law to prevent the use of AI algorithms to discriminate against protected classes, including in employment.
This alert discusses these two pieces of legislation and provides recommendations for employers as they navigate the patchwork of proposed and enacted AI legislation and federal guidance.
Senate Bill 1169
On 8 January 2025, New York State Senator Kristen Gonzalez introduced the NY AI Act because “[a] growing body of research shows that AI systems that are deployed without adequate testing, sufficient oversight, and robust guardrails can harm consumers and deny historically disadvantaged groups the full measure of their civil rights and liberties, thereby further entrenching inequalities.” The NY AI Act would cover all “consumers,” defined as any New York state resident, including residents who are employees and employers.4 The NY AI Act states that “[t]he legislature must act to ensure that all uses of AI, especially those that affect important life chances, are free from harmful biases, protect our privacy, and work for the public good.”5 It further asserts that, as the “home to thousands of technology start-ups,” including those that experiment with AI, New York must prioritize safe innovation in the AI sector by providing clear guidance for AI development, testing, and validation both before a product is launched and throughout the product’s life.6
Setting the NY AI Act apart from other proposed and enacted state AI laws,7 the NY AI Act includes a private right of action allowing New York state residents to file claims against technology companies for violations. The NY AI Act also provides for enforcement by the state’s attorney general. In addition, under the proposed law, consumers have the right to opt out of automated decision-making or appeal its results.
The NY AI Act defines “algorithmic discrimination” as any condition in which the use of an AI system contributes to unjustified differential treatment or impacts, disfavoring people based on their actual or perceived age, race, ethnicity, creed, religion, color, national origin, citizenship or immigration status, sexual orientation, gender identity, gender expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, pregnancy, pregnancy outcomes, disability, height, weight, reproductive health care or autonomy, status as a victim of domestic violence, or other classification protected under state or federal laws.8
The NY AI Act demands that “deployers” using a high-risk AI system9 for a consequential decision10 comply with certain obligations. “Deployers” is defined as “any person doing business in [New York] state that deploys a high-risk artificial intelligence decision system.”11 This includes New York employers. For instance, deployers must disclose to the end user in clear, conspicuous, and consumer-friendly terms that they are using an AI system that makes consequential decisions at least five business days prior to the use of such system. The deployer must allow sufficient time and opportunity in a clear, conspicuous, and consumer-friendly manner for the consumer to opt-out of the automated process and for a human representative to make the decision. A consumer may not be punished or face any other adverse action for opting out of a decision by an AI system and the deployer must render a decision to the consumer within 45 days.12
Further, any deployer that employs a high-risk AI system for a consequential decision must inform the end user within five days in a clear, conspicuous, and consumer-friendly manner if a consequential decision has been made entirely by or with assistance of an automated system. The deployer must then provide and explain a process for the end user to appeal the decision, which must at minimum allow the end user to (a) formally contest the decision, (b) provide information to support their position, and (c) obtain meaningful human review of the decision.13
Additionally, deployers must complete an audit before using a high-risk AI system, six months after deployment, and at least every 18 months thereafter for each calendar year a high-risk AI system is in use. Regardless of final findings, the deployers shall deliver all audits conducted to the attorney general.
As mentioned above, enforcement is permitted by the attorney general or a private right of action by consumer citizens. If a violation occurs, the attorney general may request an injunction to enjoin and restrain the continuance of the violation.14 Whenever the court shall determine that a violation occurred, the court may impose a civil penalty of not more than US$20,000 for each violation. Further, there shall be a private right of action for any person harmed by any violation of the NY AI Act. The court shall award compensatory damages and legal fees to the prevailing party.15
The NY AI Act also offers whistleblower protections, prohibits social scoring AI systems, and prohibits waiving legal rights.16
Assembly Bill 768
Also on 8 January 2025, New York State Assembly Member Alex Bores introduced the Protection Act. Like the NY AI Act, the Protection Act seeks to prevent the use of AI algorithms to discriminate against protected classes.
The Protection Act defines “algorithmic discrimination” as any condition in which the use of an AI decision system results in any unlawful differential treatment or impact that disfavors any individual or group of individuals on the basis of their actual or perceived age, color, disability, ethnicity, genetic information, English language proficiency, national origin, race, religion, reproductive health, sex, veteran status, or other classification protected pursuant to state or federal law.17
The Protection Act requires a “bias and governance audit” consisting of an impartial evaluation by an independent auditor, which shall include, at a minimum, the testing of an AI decision system to assess such system’s disparate impact on employees because of such employee’s age, race, creed, color, ethnicity, national origin, disability, citizenship or immigration status, marital or familial status, military status, religion, or sex, including sexual orientation, gender identity, gender expression, pregnancy, pregnancy outcomes, and reproductive healthcare choices.18
If enacted, beginning 1 January 2027, the Protection Act would require each deployer of a high-risk AI decision system to use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination.19 Specifically, deployers would be required to implement and maintain a risk management policy and program that is regularly reviewed and updated. The Protection Act references external sources employers can look to for guidance and compliance, such as the “AI Risk Management Framework” published by the National Institute of Standards and Technology and the ISO/IEC 42001 of the International Organization for Standardization.20
On 1 January 2027, employers deploying a high-risk AI decision system that makes or is a substantial factor in making a consequential decision concerning a consumer would also have to:
Notify the consumer that the deployer has used a high-risk AI decision system to make, or be a substantial factor in making, a consequential decision.
Provide to the consumer a statement disclosing: (I) the purpose of the high-risk AI decision system; and (II) the nature of the consequential decision.21
Make available a statement summarizing the types of high-risk AI decision systems that are currently used by the deployer.
Explain how the deployer manages any known or reasonably foreseeable risks of algorithmic discrimination.
Notify the consumer of the nature, source, and extent of the information collected and used by the deployer.22
New York City Council Local Law Int. No. 1894-A
While the NY AI Act and Protection Act are not yet enacted, New York City employers should ensure they are following Local Law Int. No. 1984-A (the NYC AI Law), which became effective on 5 July 2023. The NYC AI Law aims at protecting job candidates and employees from unlawful discriminatory bias based on race, ethnicity, or sex when employers and employment agencies use automated employment decision-making tools (AEDTs) as part of employment decisions.
Compared to the proposed state laws, the NYC AI Law narrowly applies to employers and employment agencies in New York City that use AEDTs to screen candidates or employees for positions located in the city. Similar to the proposed state legislation, bias audits and notice are required whenever an AEDT is used. Notice must be provided to candidates and employees of the use of AEDTs at least 10 business days in advance. Under the NYC AI Law, an AEDT is:
[A]ny computational process, derived from machine learning, statistical modeling, data analytics, or [AI], that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.
The NYC AI Law demands audits be completed by an independent auditor who details the sources of data (testing or historical) used in the audit. The results of the bias audit must be published on the website of employers and employment agencies, or an active hyperlink to a website with this information must be provided, for at least six months after the latest use of the AEDT for an employment decision. The summary of results must include (i) the date of the most recent bias audit of the AEDT; (ii) the source and explanation of the data; (iii) the number of individuals the AEDT assessed that fall within an unknown category; and (iv) the number of applicants or candidates, the selection or scoring rates, as applicable, and the impact ratios for all categories.23 The penalties for noncompliance with the NYC AI Law include penalties of US$500 to US$1,500 per violation, and there is no cap on the civil penalties. Further, the NYC AI Law authorizes a private right of action, in court or through administrative agencies, for aggrieved candidates and employees.
Takeaways for Employers
Employers should work to be in compliance with the existing NYC AI Law and prepare for future state legislation.24
Employers should:
Assess AI Systems: Identify any AI systems your company develops or deploys, particularly those used in consequential decisions related to employment.
Review Data Management Policies: Ensure your data management policies comply with data security protection standards.
Prepare for Audits: Familiarize yourself with the audit requirements and begin preparing for potential audits of high-risk AI systems.
Develop Internal Processes: Establish internal processes for employee disclosures related to AI system violations.
Monitor Legislation: Stay informed about proposed bills, such as AB326525 and AB3356,26 and continually review guidance from federal agencies.
Our Labor, Employment, and Workplace Safety lawyers regularly counsel clients on a wide variety of concerns related to emerging issues in labor, employment, and workplace safety law and are well-positioned to provide guidance and assistance to clients on AI developments.
Footnotes
1 Please see the following alert for more information on the proposed Texas legislation: Kathleen D. Parker, et al., The Texas Responsible AI Governance Act and Its Potential Impact on Employers, K&L GATES HUB (Jan. 13, 2025), https://www.klgates.com/The-Texas-Responsible-AI-Governance-Act-and-Its-Potential-Impact-on-Employers-1-13-2025.
2 S. 1169, 2025-2026 Gen. Assemb., Reg. Sess., § 85 (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/S1169.
3 A.B. 768, 2025-2026 Gen. Assemb., Reg. Sess., § 1550 (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/A768.
4 S. 1169, supra note 2, § 85.
5Id. § 2(b).
6Id. § 2(c).
7 Please see the following alert for more information on state AI laws: Michael J. Stortz, et al., Litigation Minute: State Generative AI Statutes and the Private Right of Action, K&L GATES HUB (Jun. 17, 2024), https://www.klgates.com/Litigation-Minute-State-Statutes-and-the-Private-Right-of-Action-6-17-2024
8 S. 1169, supra note 2. § 85(1).
9 Id. § 85(12) “High-Risk AI System” means any AI system that, when deployed: (A) is a substantial factor in making a consequential decision; or (B) will have a material impact on the statutory or constitutional rights, civil liberties, safety, or welfare of an individual in the state.
10 Id. § 85(4) “Consequential Decision” means a decision or judgment that has a material, legal or similarly significant effect on an individual’s life relating to the impact of, access to, or the cost, terms, or availability of, any of the following: (A) employment, workers’ management, or self-employment, including, but not limited to, all of the following: (i) pay or promotion; (ii) hiring or termination; and (iii) automated task allocation. (B) education and vocational training, including, but not limited to, all of the following: (i) assessment or grading, including, but not limited to, detecting student cheating or plagiarism; (ii) accreditation; (iii) certification; (iv) admissions; and (v) financial aid or scholarships. (C) housing or lodging, including rental or short-term housing or lodging. (D) essential utilities, including electricity, heat, water, internet or telecommunications access, or transportation. (E) family planning, including adoption services or reproductive services, as well as assessments related to child protective services. (F) health care or health insurance, including mental health care, dental, or vision. (G) financial services, including a financial service provided by a mortgage company, mortgage broker, or creditor. (H) law enforcement activities, including the allocation of law enforcement personnel or assets, the enforcement of laws, maintaining public order or managing public safety. (I) government services. (J) legal services.
11 A.B. 768, supra note 3, § 1550(7).
12 S. 1169, supra note 2, § 86(a).
13Id. § 86(2).
14 Id. § 89(b)(1).
15 Id. § 89(b)(2).
16Id. §§ 86(b), 89(a), 86(4).
17 A.B. 768, supra note 3, § 1550(1).
18 Id. § 1550(3).
19 Id. § 1552(1)(a).
20 Id. § 1552(2)(a).
21 Id. § 1552(5)(a).
22 Id. § 1552(6)(a).
23 N.Y.C. Dep’t of Consumer & Worker Prot., Automated Employment Decision Tools (AEDT) – Frequently Asked Questions, https://www.nyc.gov/assets/dca/downloads/pdf/about/DCWP-AEDT-FAQ.pdf.
24 Please see the following alert for more information: Maria Caceres-Boneau, et al., New York Proposal to Protect Workers Displaced by Artificial Intelligence, K&L GATES HUB (Feb. 20, 2025), https://www.klgates.com/New-York-Proposal-to-Protect-Workers-Displaced-by-Artificial-Intelligence-2-18-2025
25 A.B. 3265, 2025-2026 Gen. Assemb., Reg. Sess., (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/A3265
26 A.B. 3356, 2025-2026 Gen. Assemb., Reg. Sess., (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/A3356
Safety Perspectives from the Dallas Region: OSHA’s Evolving Investigation Tactics and Communications [Podcast]
In this episode of our Safety Perspectives From the Dallas Region series, John Surma (Houston) and Frank Davis (Dallas) delve into the intricacies of OSHA’s Rapid Response Investigation (RRI) letters and the emerging trend of OSHA’s use of email questionnaires that the agency doesn’t treat like an RRI letters. Frank and John discuss the implications of these communications, how employers can respond, and the potential legal ramifications of responding to these communications, providing valuable insights for navigating OSHA’s investigative processes.
Reminder: Los Angeles County Fair Workweek Ordinance Takes Effect in July
Retail employers should note that the Los Angeles County Fair Workweek Ordinance will go into effect on July 1, 2025.
This ordinance applies to employers in unincorporated areas of Los Angeles County. Businesses can check on the Los Angeles County Consumer & Business Affairs website to see if they are located in an unincorporated area of the county.
New obligations for retail employers under this ordinance, include:
Good-Faith Estimate: Provide new hires with a written good-faith estimate of their work schedule, including their rights under the ordinance.
Advance Notice: Post or transmit work schedules at least fourteen (14) days in advance.
Work Shift Intervals: Ensure employees have at least ten (10) hours between shifts unless they consent in writing and receive time-and-a-half pay for the second shift.
Predictability Pay: Compensate employees for changes to their schedules that occur after the advance notice period.
With regard to predictability pay, employers must provide:
One additional hour of pay for each change to the work schedule that results in no loss of time or additional work time exceeding fifteen (15) minutes.
Half the regular rate of pay for time not worked due to subtracted hours, changes to start or end times, date changes, cancellations, or on-call shifts where the employee is not called in.
Retail employers must also post notice of the covered employee’s workweek rights, which will be published by the Department of Consumer & Business Affairs. The Department of Consumer & Business Affairs has not published this Notice yet. Retail employers must also retain all required records for three years.
Navigating the New Era of Workplace Immigration Enforcement: A Comprehensive Guide for HR Professionals
In 2025, the Trump administration has intensified immigration enforcement, leading to a notable increase in workplace raids conducted by U.S. Immigration and Customs Enforcement (ICE). Industries such as manufacturing, agriculture, construction, hospitality, and food processing are particularly affected. These raids often result in the sudden loss of workers and potential administrative and criminal penalties for employers.
Understanding ICE Raids
ICE raids are typically unannounced and occur when the agency suspects a business of employing undocumented workers. During these raids, agents may seize documents like payroll records, I-9 forms, and tax documents. Unauthorized workers found on-site can be arrested.
Proactive Measures for HR Departments
To mitigate risks and ensure compliance, HR professionals should consider the following steps:
Audit and Remediate I-9 Forms Regularly review I-9 forms to ensure accuracy and completeness. Consider partnering with immigration compliance experts to conduct thorough audits and address any discrepancies.
Develop a Preparedness Plan Collaborate with legal counsel to create a comprehensive plan outlining procedures for various types of ICE visits. This plan should include guidance on determining the nature of the ICE visit and steps to take in response. citeturn0search5
Establish Communication Protocols Assign specific roles to key personnel, such as HR, security, and reception, in the event of an ICE visit. Create a concise “cheat sheet” with step-by-step instructions for responding to ICE agents.
Train Staff Appropriately Provide training materials to prepare staff for potential ICE visits. Ensure they understand their rights and responsibilities, and how to handle interactions with ICE agents professionally and legally.
Addressing Employee Concerns
Beyond legal compliance, it’s essential to support employees who may be affected by increased immigration enforcement. Provide resources to help them understand and navigate their immigration status and foster a workplace culture that values diversity and inclusion.
Conclusion
The heightened focus on immigration enforcement necessitates that HR professionals take proactive steps to prepare their organizations. By auditing I-9 forms, developing response plans, establishing communication protocols, and supporting employees, businesses can navigate this challenging landscape effectively.
U.S. Department of Education and the Department of Justice Initiate Title IX Enforcement Against Maine
The U.S. Department of Education (“ED”) is seeking to terminate federal education funding of the Maine Department of Education (“Maine DOE”) for noncompliance with Title IX of the Education Amendments of 1972 (“Title IX”). Colleges, school districts, and other regulated entities may learn valuable lessons about the Administration’s approach to federal civil rights compliance by following this story.
On February 21, 2025, the ED’s Office for Civil Rights (“OCR”) launched a directed investigation, alleging that Maine DOE had violated Title IX by allowing boys to compete on girls’ sports teams in Maine. Specifically, OCR alleged that Maine law, which permits student athletes in public school districts to compete on teams according to their gender identity, violates Title IX, citing the Executive Order, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” Shared in a previous client alert, this Executive Order sought to limit the definition of sex under Title IX, and rescinded ED’s guidance protecting LGBTQIA+ students from harassment and discrimination under Title IX..
On March 19, 2025, OCR concluded that Maine DOE was in violation of Title IX, as its public school districts, which receive federal financial assistance, had policies or practices that “allow[ed] boys to participate in girls’ athletics programs and/or den[ied] female students access to female-only intimate facilities.” The speed of the investigation was surprising; previous OCR investigations of alleged civil rights violations often took months, and sometimes years, to complete. In fact, the speed with which OCR here acted has led commenters to question whether the investigation was sufficiently thorough.
On the same day that OCR concluded its directed investigation, OCR proposed a Resolution Agreement requiring Maine DOE and Maine public school districts to fulfill a number of conditions to demonstrate compliance with Title IX.
Under the Resolution Agreement, Maine public school districts would be required to submit an annual certification of compliance with Title IX, and promptly notify OCR of any violations, such as the participation of transgender female athletes in girls’ sports. Under the same agreement, Maine DOE would be required to:
rescind or revise any prior guidance documents or rules which permitted transgender female athletes to participate in girls’ teams and categories;
revoke individual recognitions from transgender female athletes;
award those recognitions and send a letter of apology to cisgender female athletes who received the next highest score or demonstrated the next best performance;
direct to all Maine public school districts that they must not allowing transgender female athletes to participate in any athletic program, access any locker room, or access any bathroom that is designated for females; and
clarify that if that state law conflicts with Title IX, a public school district must comply with Title IX or risk losing its federal funding.
In the intervening weeks, both the Maine Principal’s Association and Maine School Administrative District No. 51 refused to sign the Resolution Agreement, citing that compliance would violate the Maine Human Rights Act (“MHRA”), which prohibits discrimination based on a range of protected characteristics, including sex, sexual orientation, and gender identity. On April 11, 2025, the Maine Attorney General confirmed to ED that the state would not sign the Resolution Agreement.
On April 12, 2025, ED referred its Title IX investigation of Maine DOE to the U.S. Department of Justice (“DOJ”) for further enforcement action and ED initiated an administrative proceeding to terminate Maine DOE’s federal K-12 education funding, including formula and discretionary grants. Notably, under OCR’s current Case Processing Manual, the process allows for a referral to the DOJ or an administrative proceeding to terminate federal funds, not both. On April 16, 2025, the DOJ filed a civil suit against Maine.
Importantly, ED is not the only executive agency that has recently investigated Maine for alleged Title IX. The Department of Agriculture froze funding used for school lunch programs on the basis of alleged violations of Title IX, and Maine has filed its own lawsuit against the Department of Agriculture seeking to stop the freeze. The Department of Health and Human Services conducted its own investigation and, like DOE, concluded that Maine had violated Title IX and referred the matter to the DOJ. The Social Security Administration also terminated a contract with Maine in early March; however, the termination was later rescinded.
While not all jurisdictions have the same gender-based protections as Maine, all entities regulated by the DOE should follow Maine’s experience for indication of OCR and DOE’s approach to that type of investigation. Institutions alleged to have violated civil rights laws should expect speedy agency action, and possibly from multiple agencies.
When Headless PAGAs Attack!
As we reported here, a split in authority has developed in the California Court of Appeal regarding what to do when an employer moves to compel arbitration of a Private Attorneys General Act (PAGA) that is “headless”—that is, a claim seeking penalties on behalf of all allegedly aggrieved employees except the named plaintiff. (This is the latest trick the plaintiff’s bar has come up with in an effort to thwart enforceable arbitration agreements, because if there’s one thing plaintiffs’ lawyers hate, it’s arbitration!)
In Leeper v. Shipt, Inc. the court held that a PAGA claim cannot be headless, so in this circumstance, the “individual” PAGA claim is implied, and can be compelled to arbitration. On the other hand, Parra Rodriguez v. Packers Sanitation, Inc. held that a court must take the complaint as it finds it and cannot “imply” an individual PAGA claim that was not pled.
The California Supreme Court has granted review of Leeper to answer two questions:
Does every PAGA action necessarily include both individual and non-individual PAGA claims, regardless of whether the complaint specifically alleges individual claims?
Can a plaintiff choose to bring only a non-individual PAGA action?
As we previously noted, Leeper held that a plaintiff could not bring a headless PAGA claim, while Parra Rodriguez simply avoided the question altogether. The California Supreme Court is now poised to answer that underlying question. The stakes are high, because if the California Supreme Court blesses the headless PAGA device, it will provide yet another avenue for arbitration-bound employees to avoid their arbitration agreements completely.
It is perhaps notable that the Supreme Court denied a motion to de-publish Leeper pending review—i.e., it can still be cited as authority to trial courts pending the Supreme Court’s ruling. Thus, Leeper remains persuasive authority, and litigants may continue to cite it in lower courts and may argue that courts should follow Leeper and not Parra Rodriguez (to the extent those decisions conflict).
We will monitor this case closely and report on further developments.
Eleventh Circuit Further Clarifies its “Reliable Indicia” Pleading Standard Under the False Claims Act
It has long been the law of the Eleventh Circuit that, under the False Claims Act (FCA) and Federal Rule of Civil Procedure 9(b), a relator must provide sufficient “indicia of reliability … to support the allegation of an actual false claim for payment being made to the government.” U.S. ex rel. Clausen v. Laboratory Corp., 290 F.3d 1301, 1311 (11th Cir. 2002). To do so, a relator may either allege details of specific false claims, see U.S. ex rel. Atkins v. McInteer, 470 F.3d 1350, 1358 (11th Cir. 2006), or direct knowledge based on the relator’s own experiences and on information gathered in the course of their employment, see United States v. HPC Healthcare, 723 F. App’x 783, 789 (11th Cir. 2018).
But what if a relator alleges the details of a scheme to submit false claims rather than the details of any individual claim? Is that enough to satisfy the Eleventh Circuit’s “reliable indicia” standard? The Eleventh Circuit says no. In United States ex rel. Vargas v. Lincare, Inc. et al., — F.4th —-, No. 24-11080 (11th Cir. Apr. 16, 2025), the court reversed in part and affirmed in part a dismissal for failure to plead a false claim with particularity as required under the FCA and Federal Rule of Civil Procedure 9(b).
Vargas began several years ago in the Middle District of Florida. Two relators sued under the FCA based on the following purported schemes: (1) delivering CPAP supplies coded as more expensive ventilator supplies or upcoding of billing of CPAP batteries and battery accessories; (2) allowing patient financial hardship co-pay waivers without assessing patients’ true financial situations; (3) delivering and billing for unnecessary durable medical equipment, and (4) paying kickbacks in the form of setup fees.
The crux of the relators’ FCA claim was the allegedly “routine” practice of submitting waivers of copayments for alleged financial hardships. They contended that the defendants “never” required patients to actually establish their financial hardship and, consequently, that the Government paid more than it should have for the claims submitted. The defendants moved for dismissal, and the court dismissed the entire complaint—the fourth amended—with prejudice. The court concluded, in a somewhat cursory fashion, that the complaint “d[id] not comply” with Rule 9(b)’s requirement to “state with particularity the circumstances constituting fraud or mistake.”
The Eleventh Circuit reversed as to the battery upcoding scheme but affirmed as to the rest. With respect to the “upcoding” scheme, relators provided detailed accounts of upcoding, complete with identifying information as to individual patients, specific claim numbers, and examples. As to the alleged “co-pay” scheme, by contrast, relators identified neither specific claims submitted “in connection with a co-pay waiver” nor any “patient whose co-pay was improperly waived.” So too with the remaining alleged schemes; the relators identified no specific false claims. And the relators could not rely on allegations of direct knowledge to avoid the requirement to allege specific claims because, put simply, they did not “allege any direct knowledge of billing activity or access to claims data.” Ultimately, the court held that the relators were not excused from “pleading claims that were actually submitted to the government” merely by pleading a “reliable indicia that there was a scheme to submit false claims.”
In Vargas, the Eleventh Circuit provides much-needed clarity as to the “reliable indicia” standard under the FCA and Rule 9(b). That standard is not a crutch that a relator may use to prop up an otherwise deficient pleading. To the contrary, the Eleventh Circuit strictly demands that a relator allege either details of specific false claims or a basis for direct personal knowledge of the submission of individual false claims with particularity. If, as in Vargas, the relator does not meet this strict standard, their claims should be dismissed.
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