Other Federal Agency Updates
Discussion
FTC Sends Warning Letter to Employer Over Noncompete Agreements
On May 8, 2026, FTC Chairman Andrew Ferguson sent a public warning letter to a mortgage service provider, encouraging the company to conduct a comprehensive review of its employment contracts, including any noncompete agreements and other restrictive covenants, to ensure compliance with applicable law. The letter encouraged the company to discontinue use of any noncompete provisions not reasonably necessary to achieve procompetitive aims and to notify affected workers that such agreements will not be enforced. The letter comes as part of the FTC’s broader noncompete enforcement strategy, and reflects the agency’s practice of reviewing publicly available court dockets to identify potentially overbroad noncompete use. In light of the FTC’s ongoing enforcement efforts, employers are encouraged to proactively review their noncompete agreements and other restrictive covenants with legal counsel to ensure compliance with applicable law.
DOT Provides Clarification on Impact of Marijuana Reclassification
On May 15, 2026, the U.S. Department of Transportation’s (DOT) Office of Drug and Alcohol Policy and Compliance issued guidance clarifying that the DEA’s recent reclassification of certain marijuana products from Schedule I to Schedule III under the Controlled Substances Act has no effect on federal workplace drug testing standards for safety-sensitive positions. Specifically, the testing procedures, cutoff levels, and Medical Review Officer verification process under 49 C.F.R. Part 40 are unchanged, and a verified marijuana positive carries the same consequences as before, including removal from safety-sensitive duties and completion of the return-to-duty process. Further, a state-issued medical marijuana card, physician recommendation, or dispensary record does not constitute a “legitimate medical explanation” for a positive result under Part 40. Employers subject to DOT drug and alcohol testing requirements should brief supervisors and safety-sensitive employees on these points, confirm that internal policies and driver-facing materials accurately reflect the current rules, and verify compliance with these requirements with their Medical Review Officer.
New Executive Order Regarding Financial Risks Tied to Immigration Status
On May 19, 2026, President Trump issued Executive Order 14406, “Restoring Integrity to America’s Financial System,” directing federal financial regulators to strengthen risk-based controls and due diligence requirements around non-work authorized populations and their employers. The order does not itself amend any existing statute or regulation, nor does it create new compliance obligations for employers. However, employers should be aware that the order directs the Treasury Department to issue guidance on financial activity “red flags,” such as payroll tax evasion and off-the-books wage payments, and instructs regulators to propose updates to customer due diligence and credit risk frameworks that may affect how financial institutions interact with employers of non-work authorized workers. The order comes as part of the current administration’s ongoing efforts to strengthen immigration enforcement across federal policy and regulation.
OPM Proposes Governmentwide NDA for Federal Employees
On May 27, 2026, the U.S. Office of Personnel Management (OPM) published a notice in the Federal Register proposing a template nondisclosure agreement (NDA) for use by federal agencies with employees who have access to sensitive government information. The proposed NDA is intended to document federal employees’ acknowledgment of, and agreement to comply with, existing legal obligations to safeguard non-public, confidential, or proprietary information created or obtained through their official duties. According to OPM, the NDA does not create new substantive restrictions on employee speech or disclosure rights, but rather provides agencies with a standardized mechanism to promote consistency across the federal government. The proposed rule is subject to a comment period that is scheduled to close on June 26, 2026, after which the OPM will consider feedback and revise the rule, as necessary. While this proposal is directed at federal agencies and their employees rather than private employers, employers that contract with the federal government should monitor developments, as the NDA requirement may extend to contractors whose duties involve access to sensitive government systems or information.
DOT Amends Collection Requirements Under Testing Rules
Effective June 10, 2026, a DOT final rule (91 FR 25507) amends 49 C.F.R. § 40.67 to address a practical gap created by the 2023 rule that authorized oral fluid specimen testing as an alternative to urine collection for DOT-mandated drug tests. The 2023 rule required collectors to switch to oral fluid testing in certain directly observed collection scenarios where a same-sex observer is unavailable. Notwithstanding, there are currently no HHS-certified oral fluid laboratories available to process such specimens. The current amendment clarifies that until at least two HHS-certified oral fluid laboratories are operational, collectors must instead contact the Designated Employer Representative (DER), who will either arrange for a same-sex observer or send the employee to another site for a directly observed urine collection. Once the two-laboratory threshold is met and DOT publishes a Federal Register notice, employers will have an 18-month grace period to transition their programs before oral fluid becomes required in these situations. Employers subject to DOT drug testing requirements should review their collection site procedures for alignment with the updated rule.
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. © 2026 ManagEase