Written by Gerald L Maatman, Jr, Jennifer Riley, Gregory Tsonis and Shannon Noelle From Duane Morris LLP on Jan 20, 2026
Questions
Q&A
What are the most important new developments in your jurisdiction over the past year in employment law?
Scrutiny of employer DEI programmes
In 2025, orders issued by the executive branch under the Trump Administration, particularly in the DEI space for private employers, constituted some of the most significant developments of the past year. After the Trump Administration issued an order prohibiting the consideration of diversity as a factor in employment decisions and in employee resource groups to the extent that such groups create an employment advantage, private employers waited with bated breath for enforcement developments. In late June 2025, such enforcement efforts matriculated by way of the Equal Employment Opportunity Commission (EEOC) issuing a subpoena to an array of private employers requiring disclosure of details about its diversity, equity and inclusion policies. After the companies refused to respond to the subpoena, in November 2025, the EEOC initiated several enforcement actions in federal court to enforce the subpoenas.
These enforcement actions by the EEOC align with the Trump Administration’s broader effort to discourage employment practices tied to DEI initiatives. Employers maintaining and initiating such programmes should seek legal advice and counsel to ensure compliance with new developments in the legal landscape, reviewing and scrutinising these programmes.
Immigration policy
The Trump Administration’s immigration policies impacted private employers in the year of 2025 through increased enforcement efforts- (ie, more I-9 audits, worksite raids, higher fees for work permits, stricter visa rules (longer processing, higher scrutiny) and workforce shortages caused by deportations).
Given the Trump Administrator’s focus on immigration issues, employers across all industries should expect increased workplace enforcement actions, including US Immigration and Customs Enforcement (ICE) raids, unannounced immigration workplace investigations and more frequent governmental I-9 audits. In addition, employers should be aware that the Employment Authorization Document (EAD) cards for foreign nationals have been shortened or terminated, which means that employers should revise the expiration dates on their I-9s and obtain new work authorisation documents in a timely manner in order to continue to employ foreign nationals. The Trump Administration also revoked and restricted visas for nationals from specific countries, citing national security, targeting 19 nations for immigration pauses and revoking hundreds of student visas.
Employers should consult counsel to prepare for unannounced workplace investigations and raids and to evaluate their employees’ EAD cards and upcoming travel.
Trends in discrimination litigation
In 2025, the US Supreme Court held that a heightened pleading burden – requiring litigants bringing a reverse discrimination claim to show proof of ‘background circumstances’ demonstrating a pattern of discrimination against the majority group – is not required. Instead, plaintiffs bringing reverse discrimination claims have the exact same pleading burden as plaintiffs bringing other types of discrimination claims.
In addition, this year the EEOC has announced that it will increase its enforcement activity with respect to anti-American national origin discrimination. Coupled with the Supreme Court clarifying that the pleading burden for reverse discrimination claims is not a heightened one, employers can expect to see increased reverse discrimination claims and litigation.
Further, as the Trump Administration issued an executive order this year redefining sex as strictly biological and excluding gender identity from its definition, fewer EEOC enforcement efforts regarding sex discrimination based on gender identity can be expected. The EEOC has sought to dismiss cases involving gender identity discrimination claims. The EEOC has also announced that it is focused on protecting women from sex-based discrimination by reversing policies concerning gender identity.
As a result, employers can expect an increase in reverse discrimination legal challenges and a potential decrease in gender identity discrimination challenges.
AI and employment laws
President Trump recently issued an executive order, in December 2025, preempting state law purporting to regulate AI technology. The executive order references the global race for dominance in utilisation of AI technology to gain advantages in economic competitiveness and national security. To win this race, the Executive Order states it is imperative that states not interfere with the usage of AI technology by establishing a ‘patchwork’ legal framework in which AI technology is regulated. The executive order also specifically references Colorado’s AI law banning algorithmic discrimination as potentially ‘forc[ing] AI models to produce false results in order to avoid a “different treatment or impact” on protected groups’. Further, the executive order requires deregulation so that there can be ‘innovation’ in the AI space, establishes an AI task force, charges the Secretary of Commerce with evaluating state laws regulating AI that interfere with the policy of deregulation and restricts deployment of federal funding to any states with such laws.
Colorado, Illinois, and New York City already have laws regulating AI on the books. Employers should consult counsel when deploying AI in connection with employment decisions given the evolving legal landscape in AI regulation on the federal and state level.
State of labour law
The National Labor Relations Board (NLRB) lacking a quorum (ie, three members) after President Trump fired the Democratic board chair of the NLRB, was stagnant the past year on ruling on unfair labour practices (ULP) charges, union representation elections and appeals of administrative law judge rulings. This stalled guidance and clarity on the current state of labour law since early 2025.
The NLRB continued to conduct investigations into unfair labour practices, but its status as a lawmaking body was stymied until President Trump’s nominees were confirmed on 18 December 2025. The US Court of Appeals for the DC Circuit affirmed President Trump’s ability to remove a board member without cause, further challenging the independence and status of the NLRB. Further, the Trump administration eliminated bargaining rights for federal works citing national security concerns. The new General Counsel, Crystal Carey, a management-side lawyer, is expected to focus NLRB enforcement activity on employer-friendly initiatives such as supporting employer speech (like captive-audience meetings), easing restrictions on non-competes and confidentiality provisions in severance agreements and aiming for more predicable labour law for businesses.
Notably, states have become more involved in private sector labour law issues previously addressed by the NLRB. Twelve states, for example, have enacted bans on mandatory employee attendance at ‘captive audience meetings’, or a meeting where employers express their view of unionisation. Further, 14 states have pay transparency laws on the books, requiring disclosure of at least a salary range on job postings, with some prohibiting hiring questions about an applicant’s prior salary level. More states have proposed pay transparency laws that may become active law heading into 2026. These laws are aimed at creating a more level bargaining position between employers and employees.
Employers should consult legal counsel with questions regarding compliance with applicable state pay transparency laws.
What upcoming legislation or regulation do you anticipate will have a significant impact on employment law in your jurisdiction?
Regulation of employment-related debt
‘Stay or pay’ contracts, meaning contracts with provisions requiring employees to pay back signing bonuses or education or training expenses if the employee leaves a job before a specific period, are facing increased scrutiny. California enacted a law, effective 1 January 2026, banning employment-related debt and prohibiting employer use of repayment agreements that can deter workers from changing jobs. New York has proposed a similar law that is awaiting the governor’s signature.
These state legislation efforts are in stark contrast to a lack of federal regulation and scrutiny of such contracts.
Proliferation of state pay transparency laws
More and more states are adding pay transparency laws, requiring disclosure of salary ranges for job postings and in some cases prohibiting questions about an employee’s previous salary level.
Further, courts’ interpretation and enforcement of certain states’ pay transparency laws have created onerous requirements for employers. The Washington State Supreme Court, for example, recently ruled that job applicants can sue for violations of the state’s pay transparency law without need to prove they applied for the job in good faith or were otherwise ‘bona fide applicants’.
Employers in states with pay transparency laws should seek careful review of job postings and interview questions to ensure conformity with the relevant law’s requirements.
Expansion of state paid leave laws
States are also expanding leave laws heading into 2026. Illinois, for example, added neonatal intensive care (NICU) leave for parents, effective June 2026. New York is also the first state with paid prenatal care leave, and Washington has expanded leave for victims of hate crimes.
Employers should review their policies and handbook provisions on leave entitlements for employees periodically given the ever-changing protections granted by state leave laws and the general trend amongst states to expand leave protections.
How has the #MeToo movement impacted the investigation or settlement of harassment or discrimination claims in your jurisdiction?
The #MeToo movement resulted in a significant rise in sexual harassment and retaliation claims since 2017. Federal law prohibits non-disclosure agreements (NDAs) in settlement agreements with respect to sexual harassment and assault claims. Federal law also prohibits forced pre-dispute arbitration of these claims. State laws (in California, New Jersey, New York, Washington, and Utah) also impose requirements on settlement agreements regarding sexual harassment and assault claims. California, New Jersey, New York, and Washington have passed laws restricting and prohibiting non-disclosure agreement clauses in settlement agreements for these claims, while Utah’s law is more targeted than laws in other states and specifically targets NDA provisions in pre-dispute agreements.
This legal landscape adds an additional consideration for employers settling such claims as, even though resolved, the claimant can still discuss the background circumstances surrounding the claim and the claim itself, which can disrupt the employer’s workplace or cause negative implications for a company’s public relations.
Several states also expanded statutes of limitations for workplace sexual harassment claims, often extending deadlines from the federal 180 or 300-day minimum to two or three years. New York and California expanded the time frame to three years for the filing of these claims, and New Jersey expanded the time period to two years.
