APPLIES TO Employers with Employees in DE, NJ, PA and U.S. Virgin Islands

EFFECTIVE August 26, 2025

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look The Third Circuit ruled that employees who violate internal computer-use policies, but do not engage in code-based hacking, do not violate the CFAA, narrowing the scope of claims employers can bring under the statute. The court also held that shared passwords lacked the characteristics required to qualify as trade secrets under federal and Pennsylvania law.

Discussion

In NRA Group, LLC v. Durenleau, the Third Circuit addressed whether an employee’s violation of internal computer-use policies could give rise to a claim under the Computer Fraud and Abuse Act (CFAA), and whether passwords shared between employees constituted trade secrets under federal and Pennsylvania law. The case arose from a situation where an employee, who was out sick with COVID-19, asked a colleague to access her company account and retrieve a password needed to renew a license. This led to the colleague emailing a spreadsheet of company passwords to the employee’s personal email, which constituted a violation of company policy but did not involve any code-based hacking.

 

The Third Circuit held that such conduct did not violate the CFAA. It clarified that the CFAA is intended to target external hacking and unauthorized access through technical means, not policy violations by employees who already have access to company systems. The court emphasized that the statute should not be stretched to criminalize breaches of workplace rules, especially given its criminal penalties. Notwithstanding, although the CFAA may no longer be a viable tool for pursuing civil or criminal claims against employees who misuse their access, employers are not without recourse. Instead, the court pointed to alternative legal avenues such as breach of contract, business torts, and negligence, which may still apply depending on the facts. As a result, this ruling narrows the scope of CFAA claims employers can bring against employees in the Third Circuit, limiting them to cases involving actual hacking rather than internal misuse of access.

 

The court also addressed trade secret protections under the Defend Trade Secrets Act (DTSA) and the Pennsylvania Uniform Trade Secrets Act (PUTSA), ruling that the passwords shared between employees were not trade secrets. The passwords lacked the necessary characteristics to qualify for protection, such as being derived from a formula or algorithm or having independent economic value. For employers, this ruling underscores the importance of distinguishing between the tools that protect valuable business information and the information itself. Passwords may guard trade secrets, but they are not inherently trade secrets unless they meet specific legal criteria.

 

Overall, this decision limits the reach of federal computer crime laws in the employment context, instead encouraging employers to strengthen their internal governance to protect sensitive information and respond effectively to policy violations.

 

Action Items

1. Review data protection policies and strategies.
2. Implement internal controls, employee training, and contractual safeguards to prevent employee misuse.
3. Consult with legal counsel on specific situations involving violations of data protection policies.

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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

APPLIES TO All Employers with Employees in KY, MI, OH, and TN

EFFECTIVE August 8, 2025

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look On August 8, 2025, in Bivens v. Zep, Inc., ruled employers are not liable for harassment that occurs to its employees by third party non-employees unless the employer intended for the harassment to occur. The court acknowledged that its analysis deviated from the standard long set by the EEOC and other circuits.

Discussion

On August 8, 2025, in Bivens v. Zep, Inc., ruled employers are not liable for harassment that occurs to its employees by third party non-employees unless the employer intended for the harassment to occur. Here, the plaintiff sales representative informed her supervisor that a customer locked her in his office and asked her repeatedly if they could date. The supervisor reassigned the client to another sales team. A few months later, the sales representative was terminated as part of a company-wide reduction in force for employees who did not meet their sales goals. The sales representative sued the defendant for hostile work environment, harassment, retaliation, and discrimination in violation of Title VII of the Civil Rights Act of 1964 and Michigan state law. The district court dismissed all of the plaintiff’s claims, so she appealed her claims to the Sixth Circuit.

 

The Sixth Circuit upheld the district court’s dismissal, but its rationale for dismissing the harassment claim varied from the standard enforced by the Equal Employment Opportunity Commission (EEOC) and other circuit courts. The standard for determining whether an employer is liable for a third party’s harassment is whether the employer “knows or should have known of the conduct and fails to take immediate and appropriate corrective action.” The Sixth Circuit court found that for the plaintiff to hold her employer liable for hostile work-environment harassment, she must show that the employer intended for unlawful harassment to occur. A plaintiff could show this by providing evidence that the employer wanted to cause the harassment or was “substantially certain” that harassment would result from its actions. The court cited the U.S. Supreme Court’s ruling in Bostock v. Clayton County which required a showing of intentional discrimination for sexual harassment creating a hostile work environment. In addition, the court cited agency law principles which allow for vicarious liability for the acts of employees but not to third party non-employees.

 

The court acknowledged that its analysis deviated from the standard long set by the EEOC and other circuits. It remains to be seen whether courts outside of the Sixth Circuit will adopt or be persuaded by its analysis to change their interpretation of enforcement of Title VII harassment claims involving third parties in employment situations. Employers should be aware that this ruling does not change their obligation to promptly investigate and address complaints of harassment or discrimination in the employment setting when third parties are involved.

 

Action Items

1. Provide adequate reporting procedures for claims of harassment or discrimination.
2. Promptly investigate claims of harassment or discrimination including those alleged against third party non-employees.
3. Train appropriate personnel on the requirements.
4. Consult with legal counsel regarding risk exposure for alleged harassment or discrimination of employees by third party non-employees.

 

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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

APPLIES TO Employers with 15+ Employees in AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and the Northern Mariana Islands

EFFECTIVE August 5, 2025

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look When an employee’s vital religious duties further an employer’s religious mission, the employee may be subject to the ministerial exemption for purposes of Title VII discrimination claims.

Discussion

In McMahon v. World Vision, Inc., the Ninth Circuit Court of Appeals looked at the mission of the religious organization employer and how the duties of the employees furthered that mission to conclude that customer service representatives (CSRs) were subject to the ministerial exception for purposes of Title VII of the Civil Rights Act of 1964.

 

Here, World Vision, a Christian-based organization whose mission is “working with the poor and oppressed to promote human transformation, seek justice and bear witness to the good news of the Kingdom of God.” World Vision pursues this mission through partnership with donors, prayer supporters, and churches. The organization’s Articles of Incorporation state its religious purposes, including “perform[ing] the functions of the Christian church” in ways that “teach and preach the Gospel” and “spread . . . the Christian religion.” It had a job posting for a CSR position that said a CSR must “[l]earn and effectively communicate World Vision’s involvement in ministries and projects around the world,” “[h]elp carry out our Christian organization’s mission, vision, and strategies,” and “[p]ersonify the ministry of World Vision by witnessing to Christ and ministering to others through life, deed, word and sign.”

 

The plaintiff, who is openly gay and in a same-sex marriage, applied for and was offered a job with World Vision as a CSR, after confirming that she could comply with the job requirements, including the Standards of Conduct. Upon accepting the offer, she advised the employer that she was expecting a child with her wife and inquired whether she would be eligible for time off as a result of the baby’s birth. Because her sexual orientation and marriage status conflicted with the organization’s Standards of Conduct, which defined marriage as between a man and a woman, it rescinded the employment offer. The plaintiff then filed suit claiming discrimination in violation of Title VII.

 

The Ninth Circuit ultimately said that the CSRs perform key religious functions central to World Vision’s mission.  CSRs are responsible for effectively communicating World Vision’s worldwide ministries and projects to donors and supporters.  CSRs engage with donors in prayer and give them the opportunity to join World Vision’s religious mission through financial contributions. They are World Vision’s “voice,” responsible for “effectively communicat[ing] World Vision’s involvement in ministries and projects around the world”. CSRs’ engagement with donors is a form of ministry itself.  Each of their religious responsibilities is “vital” to World Vision’s particular religious mission. Ultimately, it said that the plaintiff was subject to the ministerial exemption and therefore not entitled to protection under Title VII.

 

Action Items

1. Review job descriptions and organizational mission with legal counsel to determine whether the ministerial exception applies to job positions.
2. Review proposed adverse action with legal counsel to determine potential exposure to antidiscrimination laws.

 

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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

APPLIES TO All Employers with Employees in CA

EFFECTIVE August 12, 2025

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Where a pay structure pays the minimum wage for all hours worked, any additional piece-rate compensation above that amount complies with Labor Code § 226.2.

Discussion

In Williams v. J.B. Hunt Transport, Inc., the Ninth Circuit Court of Appeals said that where base pay meets minimum wage requirements, additional piece-rate pay does not make the pay structure unlawful. California Labor Code § 226.2 says that employees receiving piece-rate pay must also be paid at least minimum wage for all nonproductive hours worked (e.g., rest periods, meetings, training, etc.). Where an employee is paid at least the minimum wage for all hours worked, this standard is met.

 

Here, employees receive the minimum wage for all hours worked. They are eligible for a piece-rate bonus pursuant to a production formula if the formula calculation exceeds their minimum wage pay. When the piece-rate bonus is greater than the minimum wage, employees receive the minimum wage pay plus the piece-rate bonus to total the full amount of the production formula.

 

The plaintiffs challenged the formula as violating Section 226.2 for operating as unlawful piece-rate pay in disguise. Specifically, if the employee is paid the full amount of the production formula regardless of the number of hours worked, for example if they worked 30 hours or 40 hours the formula pay could be the same, the minimum wage base was irrelevant and only the formula applied. However, because Section 226.2 only requires that the employee be paid at least minimum wage for all hours worked, plus any additional piece-rate compensation, the pay structure met the statutory requirement.

 

Additionally, the plaintiffs claimed that the pay structure only pays hourly pay when hourly pay is higher than the total production formula, making it an unlawful “minimum wage floor” (i.e., “borrowing” compensation from one set of hours or tasks to rectify compensation below the minimum wage for a different set of tasks). However, the court said that because employees are guaranteed the minimum wage for all hours worked regardless of the production formula, and the production formula only applies when it exceeds the minimum wage, it does not operate as a minimum wage floor.

 

Action Items

1. Review pay structures for compliance with Section 226.2.
2. Update payroll processes for compliance.
3. Have appropriate personnel trained on compliance.

 

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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

APPLIES TO Employers with Employees in IL

EFFECTIVE As Indicated

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Illinois’ prevailing wage laws now apply to state and local projects funded in whole or part by the federal government if the federal rate is equal to or lower than the state rate. Employers cannot retaliate against employees who use company-issued devices to document crimes of violence and must provide access to related recordings. Differential pay for military service ends after three years of voluntary active duty but resumes if the employee returns and works for 90+ days. Paid organ and blood donation leave is now extended to part-time employees. School districts must train substitute teachers on evacuation and lockdown drills. Employers with 16 or more employees must provide unpaid NICU leave. Warehouse employers must create, file, and annually update tornado safety plans with local fire departments. Employers may offer pre-tax commuter benefits to part-time workers, excluding unionized construction workers. Digital replica contracts remain enforceable even without detailed use descriptions if consistent with the original performance’s nature. Employees leaving work due to certified mental health disabilities may qualify for unemployment benefits, and employers face penalties for failing to file required reports. Confidentiality clauses in separation agreements must expire within five years, and employees retain rights to report violations and engage in protected activity. Any authorized employee can now receive and deliver prescriptions for hospice and home health patients. Initial collective bargaining rules now apply to nearly all public employee units, regardless of size. The State Superintendent may notify schools if a licensed educator is under investigation for misconduct that poses a student safety risk. Employers must enroll new hires in the Secure Choice program within 120 days or face penalties, while employees gain more IRA options and portability. Illinois must maintain or adopt federal worker protection standards as of January 19, 2025, even if they are repealed at the federal level. Fact-finding conferences under the IHRA are now optional, and new civil penalties may be imposed for violations to protect the public interest.

Discussion

The Illinois Legislature enacted several laws impacting employee rights and protections. Key aspects of the new or amended laws are summarized below.

 

HB 1189  | Prevailing Wage. As of August 14, 2025, HB 1189 amends Illinois’ Prevailing Wage Act, imposing Illinois’ prevailing-wage mandates and processes on state and local projects funded or partially funded by the federal government when the federal prevailing wage requirement is equal to or less than the state’s prevailing wage requirement.

 

HB 1278 | Employee Use of Employer-Provided Equipment. Under HB 1278, employers are prohibited from firing, harassing, discriminating, or otherwise retaliating against an employee because of the employee’s use of employer-issued equipment to record domestic violence, sexual violence, gender violence, or any other crime of violence committed against the employee or a member of their household. Additionally, employers are required to provide employees access to any photographs, voice or video recordings, sound recordings, or other digital documents stored on an employer-issued device relating to any such crime of violence. The new law goes into effect on January 1, 2026.

 

HB 1362 | Clarification on State USERA. HB 1362 closed an unintended loophole in the Uniformed Services Employment and Reemployment Act regarding calculating compensation for employees serving as military personnel and for pay differentials for public employees serving in the military. Differential pay entitlement now terminates after a consecutive three-year absence on voluntary active service but will be reinstated if an employee returns to work for over 90 days. Differential pay is not provided for unpaid active-duty service periods. Unlike the other bills, HB 1362 took effect immediately upon signing on August 15, 2026.

 

HB 1616 | Organ and Blood Donation Leave for Part-Time Workers. HB 1616 expands paid leave benefits to part-time employees for purposes of organ donation or blood donation, effective January 1, 2026. Now, such leave is available to both full and part-time employees.

 

HB 1787 | Training for Substitute Teachers. Effective January 1, 2026, school districts are required to provide training to all substitute teachers on school evacuation drills and law enforcement lockdown drills.

 

HB 2978 | Family Neonatal Intensive Care Leave Act. Effective June 1, 2026, the Illinois Family Neonatal Intensive Care Leave Act will require employers with 16 or more employees to provide eligible employees with unpaid leave while their child is a patient in a neonatal intensive care unit (NICU). An employer with 16 to 50 employees must provide up to 10 days of leave, while an employer with 51 or more employees must provide up to 20 days.

 

HB 2987 | Warehouse Tornado Preparedness Act. HB 2987 establishes the new Warehouse Tornado Preparedness Act, requiring operators of warehouses to prepare tornado safety plans. The definition of warehouse is deferred to applicable NAICS codes, including 493 (warehousing and storage), 423 (merchant wholesalers, durable goods), 424 (merchant wholesalers, nondurable goods), 454110 (electronic shopping and mail order houses), and 492110 (couriers and express delivery services). The plans must be reviewed and updated at least once a year and must be filed with the local fire department or fire protection district. The law went into effect immediately on August 15, 2025, except portions regulating building inspector certifications, which are set to go into effect on January 1, 2027.

 

HB 3094 | Commuter Benefits. Under HB 3094, employers can offer pre-tax commuter benefits to part-time workers, starting January 1, 2026. However, these benefits are not available to construction workers who work under a collective bargaining agreement.

 

HB 3178 | Amendment to Digital Voice and Likeness Act. The Digital Voice and Likeness Protection Act, originally enacted in 2024 to protect performers’ interests in contracts involving AI-generated digital replicas, is amended to clarify terms of acceptable use and when digital replica agreements are unenforceable. Specifically, the amendment provides that the failure to include a reasonably specific description of the intended uses of a digital replica shall not render a provision in an agreement unenforceable when the uses of the digital replica are consistent with the terms of the contract for the performance of personal or professional services and the fundamental character of the photography or sound track as recorded or performed. The provisions regarding unenforceable agreements are applicable only to new performances on or after January 1, 2026.

 

HB 3200 | UI Benefits for Individuals with Mental Health Disabilities. Effective January 1, 2026, individuals who leave a job due to a mental health disability may be eligible to receive unemployment insurance benefits under a new pilot program. The disability must be certified by a licensed and practicing psychiatrist. The law also gives the Illinois Department of Employment Security (IDES) broader authority to recover unemployment insurance benefits for which a recipient is ineligible. Specifically, if an employer refuses or fails to file required new hire reports or monthly unemployment insurance wage reports, the IDES may seek an injunction prohibiting the employer from doing business in Illinois while the reports remain unfiled. The IDES must provide 30 days’ written notice to the delinquent employer before a court may enforce the injunction.

 

HB 3360 | Veterinary Technician Licensing. HB 3360 requires anyone referring to themselves as a veterinary technician to be licensed with the Department of Financial and Professional Regulation. The bill ensures veterinary technicians have graduated from an accredited program and passed the exam required for the license. The bill also requires vet techs to visibly display their license in their office.

 

HB 3638 | Amendment to Workplace Transparency Act. The state’s Workplace Transparency Act, which provides parameters around how employers handle separation, reporting, and post-employment restrictions, is expanded to provide protections for employees regarding confidentiality agreements, concerted activity to address work-related issues, and no-rehire provisions. Specifically, any confidentiality clause in a settlement or termination agreement must now expire within five years of the incident in question. Even after signing an agreement, employees retain the right to report to government agencies, participate in investigations or legal proceedings, request legal counsel, and engage in concerted activity. Additionally, the Act will now include violations of federal and state employment laws enforced by agencies like OSHA, the DOL, and the NLRB. This significantly broadens the scope of what employers must account for when drafting agreements. Employees who challenge an illegal agreement (or successfully defend against enforcement) may now recover consequential damages in addition to attorneys’ fees and costs. These amendments take effect January 1, 2026.

 

HB 3849 | Authorized Employees Can Receive Prescriptions. HB 3849 amends the Pharmacy Practice Act and the Illinois Controlled Substances Act, providing that any authorized employee (instead of an advanced practice registered nurse, practical nurse, registered nurse, or physician) of an organization, that provides hospice services to a hospice patient or that provides home health services to a person may receive a patient’s prescription orders, including controlled substances, and deliver the prescription orders to the patient.

 

SB 212 | Paid Nursing Breaks. SB 212 amends the Nursing Mothers in the Workplace Act. As originally introduced, SB 212 would have replaced the “reasonable break time” mandated under the Act for nursing mothers with a fixed 30-minute period; however, the final bill maintained the reasonableness standard. This standard remains undefined, so employers must develop and consistently enforce a policy that provides sufficient time for each affected employee. Although the 30-minute mark was not adopted, employers may consider using it as a guideline for what constitutes a “reasonable break time.” The amendment also specifies that an employer cannot require an employee to use paid leave during a break to express breast milk.

 

SB 453 | Collective Bargaining. SB 453 eliminates the reference to employer size for purposes of establishing an initial collective bargaining agreement, now covering almost all public employees (with exceptions for certain public safety employees). Previously, the rules only applied to units with fewer than 35 employees.

 

SB 1329 | Notification of Investigation for Licensed Educators. SB 1329 provides that the State Superintendent of Education may notify a licensed educator’s current or most recent employer, if the employer is a public school or school district, charter school, special education cooperative, nonpublic school, nonpublic special education facility, or public school residential facility, that the license holder is being investigated for an alleged act of misconduct that constitutes a threat to the safety of students.

 

SB 1441 | Amendment to Secure Choice Savings Program. SB 1441 amends the Illinois Secure Choice Savings Program Act by specifying that employers have up to 120 days to enroll new employees who do not opt out of the program and may face penalties if they fail to do so without reasonable cause or fail to remit contributions. The law also enhances employee flexibility by allowing contributions from multiple employers into a single account and offering both Roth and traditional IRA options.

 

SB 1976 | Workers’ Rights and Worker Safety Act. As of August 14, 2025, SB 1976 creates the Illinois Workers’ Rights and Worker Safety Act, providing that a State agency may not amend or revise its rules relating to the protection of workers’ rights or worker safety in a manner less stringent than specified federal laws (except as authorized by State law enacted after January 19, 2025). The intent is to require Illinois state agencies to impose federal workplace rules from the Biden Administration, at the state level, that are rolled back or eliminated by the Trump Administration. The law also directs the Illinois Department of Labor to replace any repealed federal occupational safety standard with a similar state standard. If no state standard on worker safety or worker rights exists related to a federal rule or if a federal protection is more stringent than a current state rule, the state will observe those federal standards. Although effective immediately upon the Governor’s signature, the law is set to be repealed on January 29, 2029.

 

SB 2487 | Amendments to IHRA. Effective January 1, 2026, SB 453 amends the Illinois Human Rights Act (IHRA), making it discretionary rather than mandatory for the Department of Human Rights to conduct a fact-finding conference. The amendment also provides for new civil penalties to “vindicate the public interest” on businesses that violate the provisions of the IHRA.

 

Action Items

1. Review federally funded projects to determine coverage under Prevailing Wage Act.
2. Update employer policies for compliance with discrimination prohibitions for employee use of employer-provided equipment.
3. Review military leave policies for compliance.
4. Revise organ and blood donation leave policies to include part-time workers.
5. For covered employers, develop and implement NICU leave policy.
6. For covered employers, develop and implement tornado preparedness plan.
7. Update pre-tax commuter benefits to include part-time employees, if applicable.
8. Review contracts involving digital replicas with legal counsel.
9. Review new hire and wage report submission process for compliance.
10. Review confidentiality clauses and other restrictive covenants with legal counsel.
11. Review and update workplace safety policies for compliance with the new Workers’ Rights and Worker Safety Act.
12. Have appropriate personnel trained on new requirements.

 

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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