Insights

Late on Friday, a federal judge in Maryland issued a preliminary injunction pausing certain elements of the Trump Administration’s two recent executive orders (“EOs”) addressing “illegal DEI programs.” The two EOs, Exec. Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing (the “J20 Order”) and Exec. Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (“J21 Order”), contain a number of provisions that, among other things, direct the federal government to dismantle “illegal DEI programs” within federal agencies and federal contractors. Please refer to our prior alert on these EOs for a full breakdown of the provisions in each.

The first day of the Trump Administration included the issuance of 26 executive orders(“EOs”), the most in modern presidential history. Among these EOs, President Trump signed the Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government Executive Order (the “EO” or “Order”). While focused on federal policy, the Order has broad implications for private sector employers.

On June 13, 2024, The Supreme Court ruled in Starbucks v. McKinney that the National Labor Relations Board (“Board”) must meet the same four-part test that other litigants must satisfy in order to obtain a preliminary injunction. This holding resolves a split amongst the circuit courts, some of which have applied a “less exacting” two-factor test to preliminary injunctions under Section 10(j) of the National Labor Relations Act (“NLRA”).

On June 3rd, 2024, in a 2-1 ruling, the 11thCircuit U.S. Court of Appeals granted a preliminary injunction against Fearless Fund (“Fearless”), enjoining the Fearless Strivers Grant Contest, a privately-funded grant competition open only to businesses owned by black women.  In another victory for the American Alliance for Equal Rights (“Alliance”) and Edward Blum, the legal strategist behind the Supreme Court’s recent rulings against college race-based admissions, the 11thCircuit held that the Alliance had standing to sue on behalf of three pseudonymously named business owners who were “ready and able” to enter the Contest but “were excluded from the opportunity to compete . . . solely on account of the color of their skin.”  The Court determined that plaintiffs were likely to prevail in the lawsuit, finding that privately funded businesses like Fearless can violate 42 U.S.C. § 1981, originally enacted as Section 1 of the Civil Rights Act of 1866, through contract-based programs restricted to persons of color.  

The EEOC has released long-awaited Enforcement Guidance on Harassment in the Workplace, No. 915.064 (Apr. 29, 2024) (the “Guidance"). The Guidance addresses a number of timely issues and should be of great interest and practical use for employers, as it sets out the EEOC’s position on such questions as the tension between pronoun usage and religious practice; abortion in the context of sex harassment; and social media as the basis for a harassment claim. This update is the first of its kind in 30 years, and largely tracks the proposed guidance that the EEOC issued in October of 2023.  

On April 15, 2024, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced in a press release its implementation of a Final Rule on the Pregnant Workers Fairness Act (“PWFA”), published that day in the Federal Register.  The Final Rule fundamentally extended the PWFAs protections, broadly defining what had been ambiguous phrases to expand the scope of individuals qualifying for accommodations, when employees and applicants for employment may seek an accommodation, and how employers should engage with them upon receiving a request for accommodation.

On March 5, 2024, a federal judge in Texas struck down a federally-sponsored racial preference extended to minority groups seeking to access capital and government contracts. Nuziard v. Minority Business Development Agency (“Nuziard”). Plaintiffs, who are non-minority business owners, challenged a preference provided by the Minority Business Development Agency (“MBDA”), a bureau of the Department of Commerce, to “socially or economically disadvantaged individual[s],” defined to include African Americans, Hasidic Jews, Hispanic Americans, Native Americans and Pacific Islanders. The court struck down the MBDA’s presumption that such racial minorities are socially disadvantaged, finding the preference violated the Equal Protection Clause.   Nuziard, like the recent decision by a federal court in Tennessee in Ultima Services Corp. v. U.S. Department of Agriculture (“Ultima”), follows the Supreme Court’s decision in Students for Fair Admissions, Inc. v. Pres & Fellows of Harvard College, 600 U.S. 181 (2023) (“SFFA”) and, like Ultima, advances the mission of activist organizations across the country seeking to invalidate race-based presumptions in federally funded and sponsored entitlement programs.  

On June 29, 2023, the Supreme Court held that it is unconstitutional (under the Constitution’s Equal Protection Clause, as to public institutions) and a violation of Title VI of the Civil Rights Act of 1964 (as applicable to private institutions accepting federal financial assistance) for colleges and universities to consider race as a factor in the admissions process. See Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., No. 20-1199, 2023 WL 4239254 (U.S. June 29, 2023) (“Harvard”), a summary of which can be found here. This decision upended decades of precedent and has caused employers in the private sector to ask how the decision will impact diversity, equity, and inclusion (“DE&I”) initiatives and employment decisions. This article addresses the impact of Harvard, eight months later.

On October 27, the National Labor Relations Board (“NLRB”) issued a long-awaited Final Rule (“Final Rule”) that will dramatically alter the test for joint-employer status. As proposed,  the Final Rule rescinds the NLRB’s 2020 Final Rule, with the NLRB claiming that the new rule “more faithfully grounds the joint-employer standard in established common-law agency principles.”   In effect, the Final Rule will make it easier for employees of franchises, staffing agencies, and potentially a broad swath of contractors to show that two entities are joint employers. If an entity is found to be a joint employer with the direct employer of unionized employees, “under common-law agency principles,” the entity can be liable for the unfair labor practices of the co-employer and can be required to negotiate with the union representing the workers under the National Labor Relations Act (“NLRA”).  The NLRB’s new rule will take effect on December 26, 2023 and is not retroactive.

On February 10, 2022, Congress passed H.R. 4445, titled the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” The legislation would amend the Federal Arbitration Act (FAA) to render pre-dispute employment arbitration agreements voidable at the election of the employee for all sexual harassment and sexual assault claims. Employees will still be permitted to choose to arbitrate these claims. The legislation would also render pre-dispute employee waivers of the right to bring such claims jointly or on a class basis voidable.

On Friday, July 9, President Biden signed an Executive Order (“EO”) setting forth a “whole-of-government” effort aimed at promoting competition in the American economy. Within the 72 initiatives directed at more than a dozen federal agencies are directives that, if implemented, will significantly impact the labor market and employers across all sectors.

On Friday, April 3, 2020, the Centers for Disease Control and Prevention (CDC) issued guidance recommending that individuals wear cloth face coverings, or masks, to help prevent the spread of COVID-19. The guidance “recommends wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain (e.g., grocery stores and pharmacies) especially in areas of significant community-based transmission.” The CDC noted that it does not recommend the use of surgical masks or N-95 respirators, which must continue to be reserved for healthcare workers and other medical first responders. Instead, it encourages the use of simple cloth face coverings, including those fashioned from household items.

On August 12, 2019, Governor Cuomo signed into law a series of significant amendments to the New York State Human Rights Law (“NYS HRL”) and other statutes to provide “increased protections for protected classes and special protections for employees who have been sexually harassed.”  Most changes are effective October 11, 2019 (sixty (60) days after enactment), for claims filed on or after that date.  These amendments will, among other expansions, broaden the prohibition against subjecting individuals to harassment in the workplace, no longer requiring the demonstration that the conduct was “severe or pervasive under precedent applied to harassment claims.”  This standard now applies to harassment because of an individual’s age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, domestic violence victim status or participation in protected activity under the NYS HRL. Employers and other covered entities will be required, in order to avoid liability, to plead and prove the affirmative defense that “the harassing conduct does not rise above the level of what a reasonable victim of discrimination with the same protected characteristic would consider petty slights or trivial inconveniences.”  The amendments also eviscerate application of the Faragher-Ellerth defense to hostile environment claims under the NYS HRL.  Specifically, the fact that the individual did not make a complaint about the harassment to an employer or other covered entity “shall not be determinative of whether [it] shall be liable.” 

The U.S. Supreme Court held in Fort Bend County, Texas v. Davis, No. 18-525 (June 3, 2019), that a Title VII claim of religious discrimination could proceed notwithstanding the failure to properly add that claim to the Charge of Discrimination filed with the Equal Employment Opportunity Commission (EEOC). In a unanimous Opinion authored by Justice Ginsburg, the Court concluded that the Title VII requirement that a charge be filed on a claim as a pre-condition to its assertion in a Title VII action in court was not a “jurisdictional” requirement that can be challenged at any stage of a proceeding. Resolving a conflict among the Courts of Appeals, the Court held that Title VII’s mandatory claim-processing rule is subject to forfeiture if not timely asserted.

With its roots in Hollywood and the entertainment industry, the #MeToo movement, and the Times Up legal defense fund created in response, over the past year extended into various other industries including the financial sector, tech, and even the federal judiciary. 

The wave of transparency and accountability heightened by the #MeToo movement has hit Capitol Hill. After months of negotiations, on December 13, 2018, Congress passed S. 3749, a bipartisan, bicameral bill to amend the Congressional Accountability Act of 1995 by providing new procedures for initiating, reviewing, and resolving sexual harassment claims. President Trump signed the bill on December 21, 2018. The amendments will become effective in June 2019 (180 days after President Trump signed the bill into law).

The New York State Division of Human Rights (NYDHR) and the New York State Department of Labor (NYDOL) released their final guidance, including a model sexual harassment prevention policy and training, on October 1, 2018. These materials clarify the obligations imposed on employers who do business in New York State under legislation signed by Governor Cuomo in April of this year aimed at preventing sexual harassment in the workplace. This guidance comes just one week before the October 9, 2018 deadline for employers to issue a compliant policy, although it extends the deadline for employers to conduct compliant training from January 1, 2019 to October 9, 2019. Note that the New York City Stop Sexual Harassment Act, also enacted earlier this year, requires a city-specific training to be completed by March 31, 2020. The requirements of the mandated city training largely overlap with the state training, with the notable addition of a bystander intervention training component. Employers in New York City should consider conducting training that complies with both the city and state requirements before the state-mandated October 9, 2019 deadline to be most efficient with employees’ time and attention.

The New York City Council recently passed the Stop Sexual Harassment in New York City Act ("NYC Act"), amending the New York City Human Rights Law and creating a number of new requirements for New York City employers. Among these new mandates are anti-sexual harassment training and other steps aimed at preventing sexual harassment in the workplace. The bill was passed one day after New York State Governor Andrew Cuomo signed into law the New York State Legislature's anti-sexual harassment legislation as part of the 2019 budget ("NY State Law"), which creates similar anti-sexual harassment training requirements at the state level. Together, these measures reflect increased efforts by state and local legislatures to combat sexual harassment in the workplace and underscore the importance to employers of complying with these new laws.

In a blow to victims of data theft, the Ninth Circuit in United States v. Nosal held less than a year ago that the Computer Fraud and Abuse Act (CFAA) was not an available remedy where the alleged thief had authorized access to the computer system from which data was stolen. The Northern District Court of California's recent decision in Oracle America, Inc. v. Service Key, LLC (No. 12-00790) may well breathe new life in the CFAA by recognizing claims against hackers who not only steal but traffic access credentials.

The Supreme Court of Texas, in a closely divided opinion, has just made it easier for employers to enter into and enforce covenants not to compete in Texas.   In Marsh USA Inc. and McLennan Companies, Inc. v. Cook, No. 09-0558, 2011 Tex. LEXIS 465 (Tex. June 24, 2011),  the Court broke new ground in ruling that stock options constitute sufficient consideration to support a non-compete agreement. And going further still, the Court made clear that the stock options, when issued during an employee's employment, would support the enforcement of a non-compete to protect confidential information that the employee had access to prior to execution of the non-compete.  There is every indication that the ruling will apply more broadly than stock options to include other kinds of consideration.