Federal Court Enjoins Trump’s DEI Certification Requirement for Federal Contractors

On April 15, 2025, a U.S. District Court in Illinois issued a preliminary injunction enjoining the Department of Labor (DOL) from implementing certain provisions of President Trump’s January 20 and January 21 Executive Orders (EO) related to Diversity, Equity, and Inclusion (DEI) based on challenges under the First Amendment and separation of powers grounds. Specifically, the court blocked the DOL from enforcing the EO’s requirements that federal contractors certify that their compliance with federal anti-discrimination laws is material for purposes of the False Claims Act, and that they do not operate “any programs promoting DEI.” The court noted that the provision required the guarantees to make an “impossible choice,” requiring them to either decline to make a certification and therefore lose their grants, or risk making an affirmative certification that will be deemed false. Accordingly, the court issued a nationwide injunction against the DOL’s enforcement of the certification provision.

 

DOL Independent Contractor Rule Enforcement Paused for Reconsideration

On May 1, 2025, the Department of Labor’s Wage and Hour Division (WHD) issued a Field Assistance Bulletin announcing that it will not enforce the final rule Employee or Independent Contractor Classification Under the Fair Labor Standards Act while it considers whether to rescind the rule. Issued in 2024 under the Biden Administration, the rule outlined the new framework for determining employee or independent contractor status under the Fair Labor Standards Act (FLSA). The decision to consider rescinding the rule is consistent with the WHD’s stated position in defending a number of lawsuits challenging the legality of the 2024 rule. The WHD instructs employers in the Field Assistance Bulletin to instead refer to Fact Sheet #13 (July 2008) and Opinion Letter FLSA 2019-6 for its current analysis with respect to determining employee versus independent contractor status in FLSA investigations.

 

Sixth Circuit: EFAA Applies to Disputes Arising After Enactment Date

In Memmer v. United Wholesale Mortgage, LLC, the Sixth Circuit Court of Appeals ruled that a plaintiff’s case may be subject to the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) if the dispute between the parties occurred after the law was enacted on March 3, 2022. In this case, a mortgage underwriter alleged she faced numerous instances of discrimination and harassment by a coworker. She subsequently resigned and filed claims against her employer under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Fair Labor Standards Act, Michigan’s Elliott-Larsen Civil Rights Act, and Michigan’s Persons with Disabilities Civil Rights Act. The employer sought to compel arbitration under a valid contract and the district court agreed. However, the plaintiff appealed citing that the EFAA precludes forced arbitration of her claims despite the fact she resigned prior to the enactment of the EFAA. To determine whether the EFAA applied, the court ruled on the EFAA’s use of the words “dispute” and “claim.” The court found that “the EFAA applies to claims that accrue and disputes that arise on or after March 3, 2022.” Since “all subsequent events, including the filing of a charge with the EEOC, took place after the date of enactment,” the EFAA did apply and remanded the case back to the district court. Employers should be aware that disputes arising after the enactment of the EFAA may still be litigated even if the alleged incident(s) occurred prior to the date of enactment.

 

Eighth Circuit: MSHA Final Silica Rule Stayed

On April 18, 2024, the Mine Safety and Health Administration (MSHA) issued the final rule Lowering Miners’ Exposure to Respirable Crystalline Silica and Improving Respiratory Protection to reduce miner exposures to respirable crystalline silica and improve respiratory protection for all airborne hazards effective April 14, 2025. This rule cut in half the amount of silica dust permitted around coal and other miners and required regular testing of miners. On April 8, the MHSA issued a Notice to Stakeholders that it is temporarily pausing enforcement of the rule until August 18, 2025 to provide time for operators to secure necessary equipment and come into compliance with the final rule. The pause does not affect the compliance date of April 8, 2026, for metal and non-metal mines. On April 11, 2025, the Eight Circuit Court of Appeals also granted a temporary administrative stay to block enforcement of the final rule while it considers permanently blocking enforcement or allowing enforcement to begin. The mining industry sought to block enforcement stating that it would cause irreparable harm to the mining industry. The court granted the stay citing non-responsiveness from MSHA due to the change in the administration and the ongoing cost of meeting compliance requirements for the mining industry. Despite MSHA’s delayed enforcement, the court’s temporary administrative stay will remain in place until a final ruling is issued by the court in the underlying matter.

 

Eighth Circuit: Minnesota MHRA Applies to Residents Only

On April 9, 2025, in Kuklenski v. Medtronic USA, Inc., the Eighth Circuit Court of Appeals ruled that the protections of the Minnesota Human Rights Act (MHRA) only applied to residents of Minnesota. Here, the plaintiff was a Michigan-based remote employee who was terminated shortly after the end of protected leave taken under the Family and Medical Leave Act (FMLA). The plaintiff sued her employer alleging the employer violated the MHRA by refusing to provide a reasonable accommodation and terminating employment. The employer moved for summary judgment arguing that the MHRA defines an employee as a person who works for an employer and “resides or works in this state.” The court agreed citing that the plain meaning of the statute requires “some degree of physical presence in Minnesota.”

 

California: No Defamation Claim Based on Wrongful Termination

On January 24, 2025, in Hearn v. Pacific Gas and Electric Company, the California Court of Appeal said when a claim of defamation is just a wrongful termination claim by another name, both cannot be maintained. Here, a workplace investigation found wrongdoing that led to an employee’s termination, and a jury found that the defamation claim was based on statements made in the report for the investigation. The court said, in a wrongful termination case, an employee cannot recover in tort based on the same underlying harm that is caused by the termination, unless the harm extends beyond the termination.

 

Connecticut: Larger Discretion in Workers’ Compensation Benefits for Individuals at MMI

On March 18, 2025, the Connecticut Supreme Court ruled in a case titled Gardner v. Department of Mental Health and Addiction Services that workers’ compensation administrative law judges (ALJs) can award ongoing temporary partial disability (TPD) benefits to claimants who reach maximum medical improvement (MMI), rather than require conversion of TPD benefits to permanent partial disability (PPD) benefits. Although this ruling contradicts long-standing case law in the jurisdiction, the Court found that the state’s workers’ compensation law explicitly affords the ALJ such discretion. How the ALJs will exercise this discretion and whether the Court’s decision will apply retroactively remains to be seen at this time, so employers should continue to monitor future developments.

 

Illinois: Amendments to the One Day Rest in Seven Act

As of March 21, 2025, SB 3180 will prohibit retaliation under Illinois’ One Day Rest in Seven Act. The Act requires every employer, with certain exceptions, to provide employees with at least 24 consecutive hours of rest in every calendar week. The amendments under SB 3180 provide that an employer is in violation of the Act if the employer discharges, takes adverse action against, or in any other matter discriminates against an employee because the employee has exercised a right under the Act, complained to the employer, filed or plans to file a proceeding under or related to the Act, or has testified or is about to testify in an investigation or proceeding under the Act. Although there is no private right of action for violations of the act, aggrieved employees can file a complaint with the IDOL for alleged violations and the IDOL may pursue an action.

 

Michigan: New Veteran’s Employee Resource Notification Act

Effective April 2, 2025, HB 5736 created the Veteran’s Employee Resource Notification Act. Employers with one or more full-time employees must conspicuously display a new labor law poster at the workplace that provides resources available to veterans. Michigan’s Department of Labor and Economic Opportunity and the Department of Military and Veterans Affairs recently created and released posters complying with the new requirements. The posters include a list of resources available to Michigan veterans, including mental health and substance abuse services, education and job training resources, tax benefits, services related to veteran designation on a driver’s license or official state personal identification card, resources for unemployment benefits, legal services, and more.

 

Ohio: Workplace Violence Prevention Requirements for Hospitals

As of April 9, 2025, HB 452 requires hospitals to implement comprehensive workplace violence prevention plans and provide resources to better protect healthcare workers. At a minimum, hospital employers must establish a security plan for preventing workplace violence and specify various requirements for the plans, including that the plans be developed by an interdisciplinary team that includes direct care providers and that the plan is reviewed and evaluated annually. The legislation also requires that hospitals have a workplace violence incident reporting system that clearly defines when incidents should be reported to law enforcement and establishes the ability of hospital security personnel to access online security training previously only available to Ohio peace officers.

 

South Carolina: Arbitration Agreements Must Meet Elements of Enforceable Contracts

On March 5, 2025, in Lampo v. Amedisys Holdings, LLC, the Supreme Court of South Carolina ruled that an employer could not compel arbitration of an employee’s claims because the elements required to create an enforceable arbitration agreement were not met. Specifically, the employee’s failure to opt out of accepting an arbitration offer did not create acceptance of the offer. Here, the employee was sent an arbitration agreement via company email that she accessed and “acknowledged” by clicking on the webform. The agreement also stated in bold font: “Unless you opt out of the Dispute Resolution Agreement within 30 days of today’s date, you will be bound by it, which will affect your legal rights.” The employee did not opt out. The Court found that the employee’s decision to continue working and not opt out did not indicate her desire to be bound by the arbitration agreement. In reaching its ruling, the Court said that silence and inaction can create acceptance of an offer, but only in limited circumstances which did not exist in this case.

 

Utah: Regulation of Earned Wage Access Service Providers

Effective May 7, 2025, HB 279 enacts the Earned Wage Access Services Act (Act) which regulates providers of earned wage access services (EWA services). EWA services allow employees to access their wages as they are earned and not just on regular paydays. EWA providers are required to register with the Utah Division of Consumer Protection and renew their registration annually. Providers are also required to: (1) develop and implement procedures to address consumer questions and complaints; (2) provide consumers with clear and conspicuous disclosures; (3) obtain consent to change the terms and conditions of the EWA services; (4) allow cancellation of services at any time; (5) offer a no-fee option to receive funds; (6) comply with privacy and information security laws; and (7) deliver funds through the method agreed upon by the parties.

 

Tennessee: Right to Petition is Not Protected from Retaliation

On March 26, 2025, the Supreme Court of Tennessee issued an opinion in Smith v. BlueCross BlueShield of Tennessee, finding that an insurance company’s termination of an at-will employee for petitioning legislators about COVID-19 vaccine requirements did not fall within a “violates clear public policy” exception to at-will employment. Because the right to petition in the Tennessee Constitution only constrains the government, not private parties, a private employer does not violate “public policy” by terminating an employee for exercising that right.

 

Virginia: Governor Vetoes Workplace Violence Legislation

On March 7, 2025, the Virginia House of Delegates passed HB 1919, which would have required large employers with 100 or more employees to implement workplace violence prevention policies by January 1, 2027. However, Governor Glenn Youngkin vetoed the bill on the basis that it misclassified workplace violence as a regulatory issue as opposed to a criminal matter. The Governor opined that the Virginia Occupational Safety and Health program is already equipped to address workplace hazards, making the bill duplicative and burdensome. The Virginia legislature has recommitted to exploring the issue of workplace violence through further regulatory action, so employers should continue to monitor developments.

 

Virginia: Regulations for the Employment of Minors in Barber Shops and Cosmetology Salons

Effective July 1, 2025, Virginia SB 1228 allows children aged 16 or older to work in licensed barbershops or cosmetology salons under specific conditions. The bill aims to provide structured opportunities for young individuals to gain professional experience in the cosmetology and barbering industries. Employers must ensure that these minors are either apprentices, enrolled in a work-training program, or have obtained a cosmetology or barber license.

 

Washington: Using Paid Sick Leave for Immigration Proceedings

Effective July 27, 2025, HB 1875 amends Washington’s paid sick leave law to allow employees or drivers for a transportation network company (e.g., Uber) to use paid sick leave “to prepare for, or participate in, any judicial or administrative immigration proceeding involving the employee or employee’s family member.” Employers are permitted to request documentation verifying the new use of paid sick leave. The following types of documentation can be accepted by the employer: (1) documentation that the employee or the employee’s family member is involved in a qualifying immigration proceeding from an advocate for immigrants or refugees, an attorney, a member of the clergy, or other professional; or (2) an employee’s written statement that the employee or the employee’s family member is involved in a qualifying immigration proceeding. The documentation cannot disclose personally identifiable information about a person’s immigration status or underlying immigration protection.

 

Washington: Amendment to Pay Transparency Law

Washington’s legislature passed SSB 5408 amending the state’s pay transparency law. It is currently pending the governor’s signature and, if signed, is set to go into effect in the summer 2025. The amendment allows employers to include a fixed wage rather than a wage range in compliant job postings. Employers are also not liable for postings that are digitally replicated and published without their consent. More importantly, the amendment allows employers, from the amendment’s effective date to July 27, 2027, to correct violations before a job applicant can seek remedies. If the employer receives a written notice of noncompliance, the employer can correct the posting within five business days of receipt of the notice, including contacting any third-party posting entities. If the posting is corrected within this time frame, the employer is relieved from penalties, damages, or other relief under the law. For complaints made to the Director of the Department of Labor & Industries, the Director will attempt to resolve violations first by conference and conciliation and may then issue a citation and assess statutory damages of no less than $100 and no more than $5,000 per violation. Factors in determining the amount of the damages include: whether the violation was committed willfully or the violation is a repeat violation; the size of the employer; the amount necessary to deter future noncompliance; the purposes of this chapter; and any other factor deemed appropriate by the Department. The Director also has the right to assess a civil penalty of up to $500 for a first violation or up to $1,000 for a repeat violation. A private civil action brought by an applicant or employee may result in statutory damages of no less than $100 and no more than $5,000 per violation, plus reasonable attorneys’ fees and costs.

 

Wisconsin: Non-Criminal Arrest Records Covered Under Wisconsin Fair Employment Act

On April 10, 2025, in Oconomowoc Area School District v. Cota, the Wisconsin Supreme Court ruled that the definition of “arrest record” under the Wisconsin Fair Employment Act (WFEA) includes non-criminal offenses like municipal theft. Here, members of the school district’s grounds crew were suspected of taking district scrap metal to a local processor and keeping the proceeds for themselves rather than remitting them to the district. An internal investigation failed to determine whether the employees were responsible, so the district referred the allegations to law enforcement. Law enforcement did not uncover new evidence but cited the employees for municipal theft, a non-criminal offense. Based on this citation, the district fired the employees. The citations were eventually dismissed against the employees. The employees then filed claims of arrest record discrimination under the WFEA. In its ruling, the court cited the WFEA’s use of “any…other offense” in the definition of arrest record to mean inclusion of “both criminal offenses from jurisdictions that do not classify crimes as either felonies or misdemeanors and non-criminal offenses under Wisconsin law.” This expansive interpretation of arrest records means that employers should be cautious about adverse actions taken against employees due to non-criminal arrest records.

 

 

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase