Employment

President Trump’s executive order entitled Removing Barriers to American Leadership in Artificial Intelligence (the “Trump AI Order”) seeks to create “a path for the United States to act decisively to retain global leadership in artificial intelligence.”  The Trump AI Order purports to “revoke[] certain existing AI policies and directives that act as barriers to AI innovation,” although it does not shed light on any specific policies and directives that are revoked by virtue of the order.  The Trump AI Order also comes in the wake of President Trump’s earlier Executive Order revoking several Biden-era orders, most notably including President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (the “Biden AI Order”), which had directed federal agencies to undertake various initiatives and studies regarding the uses, benefits, and potential pitfalls of AI.  While the Trump AI Order broadly impacts AI-policy on multiple levels, this advisory focuses on its impact on the U.S. workforce.    

As we previously summarized, President Trump recently issued a number of wide-ranging executive orders intended to transform the social and regulatory landscape, including in the workplace.  One of the most comprehensive of these executive orders is entitled: Defending Women From Gender Ideology Extremism And Restoring Biological Truth To The Federal Government (the “Order”).  The Order takes aim at what it terms “gender ideology,” makes clear that the federal government will recognize only male and female biological sexes (not gender or gender identity), and directs the federal government to “enforce all sex-protective laws to promote this reality” by creating and implementing the Order’s strict definitions.  While the Order is overtly targeted at erasing policies, practices, and procedures that acknowledge or support gender identity or transgender individuals across the federal government, its reach goes beyond the public sector and has broad implications for private employers as well.   

Section 3 of President Trump’s Executive Order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” addresses the federal contracting process and revokes Executive Order, EO 11246, a long-standing order that imposed affirmative action requirements on federal contractors and recipients of federal grants. This post covers the impact of EO 11246’s revocation.

On January 23, 2025, a coalition of Attorneys General from ten states, led by AG Ken Paxton of Texas, penned a letter to six major U.S. financial institutions, warning that their embrace of “race-and-sex-based quotas” and investment decisions made “in the furtherance of political agendas” might run violate of federal and state laws. AG Paxton invited these firms to answer a series of questions regarding their policies, but nevertheless reserved the right to take “enforcement actions to vindicate federal or State laws.” This letter comes on the heels of President Trump’s recent executive orders including one entitled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”, which we wrote about previously here. What does the letter say, and what, if anything, should other companies do in response? We explore these questions and offer some guidance about them below.

In a flurry activity, President Trump dismissed the General Counsel for the Equal Employment Opportunity Commission (EEOC), the General Counsel for the National Labor Relations Board (NLRB), and the initial acting General Counsel of the NLRB who temporarily filled in the General Counsel role.  President Trump also removed a Biden-appointed NLRB Board member and two Biden-appointed EEOC Commissioners.  These actions are likely to disrupt operations at these agencies, including with respect to any ongoing formal matters and in the dissemination of general guidance and oversight they provide. 

In the wake of President Trump’s “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” Executive Order (the “Executive Order”) (discussed further here), many companies are in the process of revisiting their existing diversity, equity, and inclusion (“DEI”) programs and initiatives to reconfirm their legal viability. Close examination of the Executive Order reveals that the Administration hopes to rely on the False Claims Act (“FCA”) as another statutory weapon aimed at eliminating what it perceives as a scourge of “illegal,” “demean[ing],” and “immoral” DEI programs. The False Claims Act, 31 U.S.C. §3729, is a whistleblower statute intended to prevent companies from defrauding the government. Its inclusion in the Executive Order opens federal contractors and federal grant recipients to the possibility of substantial criminal and/or civil liability where they operate DEI programs deemed to violate the law. We discuss the FCA and its impact under the Executive Order more below.

Pay transparency laws have taken the country by storm over the last few years, and 5 additional states (Illinois, Minnesota, Massachusetts, New Jersey, and Vermont) have debuted or will debut their own versions in 2025.  These laws aim to close discriminatory-based pay gaps.  This shared goal, however, is one of the only similarities in the now-15 state-specific laws promoting pay transparency.  Among other differences, there are myriad differences among the laws’ employee coverage thresholds, job posting requirements, and remedies, meaning employers must remain hyper-aware of any compliance obligations – some of which may be triggered by merely advertising a remote position that could feasibly be performed in states where the employer does not otherwise have a physical presence.  

Shortly before the Trump Administration started, the U.S. Department of Labor (DOL) issued an opinion letter clarifying the “substitution” provision under the federal Family and Medical Leave Act (FMLA) when it intersects with a state or local paid family and medical leave program.

A recent Ontario Court of Appeal (“ONCA”) decision signals a pressing need for Canadian employers to review and consider updating their contractual termination of employment provisions. Otherwise, employers are at risk of incurring higher than expected liabilities.

The United States Supreme Court recently held in E.M.D. Sales, Inc. v. Carrera that the “preponderance of the evidence” burden of proof applies in determining whether an employee is exempt under the federal Fair Labor Standards Act (FLSA).  In issuing its unanimous opinion, the Supreme Court rejected the employee’s argument that the higher “clear and convincing” evidence standard should apply.

President Trump has issued a flurry of wide-ranging executive orders intended to shake up the employment landscape.  One of those orders, entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Executive Order”), takes aim at non-compliant DEI programs and policies.  It also creates a momentous change in the federal contractor landscape by revoking Executive Order 11246, which has, for the past sixty years, served as the foundation for non-discrimination and affirmative action requirements in the federal contracting space.  Although the Executive Order’s mandates are vague in many places and raise more questions than they answer, at bottom, the Executive Order appears designed to attempt to effectively stamp out DEI programs and policies in the federal workforce, while putting private sector employers on notice and pushing them to proactively modify, narrow or even end their DEI initiatives.  But as we’ll discuss more below, these developments do not compel private employers to rescind their DEI programs and policies entirely; instead, employers should use the Executive Order as an opportunity to review their existing programs and policies to ensure that they (i) continue to align with their mission and organizational goals, (ii) are legally compliant in light of the change in administration, and (iii) whether subsequently modified or not, thereafter are effectively communicated to stakeholders. 

The most recent amendment to New York’s Workers’ Compensation Law, which went into effect on January 1, 2025, permits any employee to seek workers’ compensation benefits when they experience a “mental injury premised upon extraordinary work-related stress incurred at work.”  

New York employers are – once again – required to provide employees with notice regarding New York’s reproductive health decision making protections.  The U.S. Court of Appeals for the Second Circuit vacated a lower court’s permanent injunction of a New York law that requires employers to include a notice in their employee handbooks regarding the State’s prohibition of discrimination based on reproductive health choices. 

In July 2024, Massachusetts passed into law An Act Relative to Salary Range Transparency (the “Act”). We previously wrote about this Act in its legislation phase here and provided answers to frequently asked questions here.

A year after announcing its first-in-the-nation effort to increase access to pregnancy-related healthcare, New York’s “paid prenatal leave” law is officially set to take effect on January 1, 2025.  Employers will be required to begin offering New York employees 20 hours of paid leave during a 52-week period to attend to prenatal medical needs, which is in addition to existing sick/safe leave already required in New York.  The New York State Department of Labor recently released an FAQ document to assist employers in implementing this new leave.  We detail some of the most pertinent guidance below.

Ontario introduced Bill 229, Working for Workers Six Act, 2024 on November 27, 2024, the latest in a series of legislation amending employment laws in Ontario. If Bill 229 is passed as is, here are some of the key changes that will affect Ontario businesses.

The U.S. Supreme Court recently granted cert in a hotly contested case addressing the standards of proof applicable to reverse discrimination claims under Title VII.  The case comes on the heels of the court’s decision last term in Muldrow v. City of St. Louis, Mo., where it lowered the standard to prove that an employee suffered an adverse employment action (now, employees need only show that they suffered “some harm respecting an identifiable term or condition of employment”).  In the next term, in Ames v. Ohio Department of Youth Services, SCOTUS will turn its attention to so-called “reverse” discrimination and whether members of a majority group will be required to meet a heightened pleading standard to prove their claims.

Ontario recently passed Bill 190, Working for Workers Five Act, 2024, on October 28, 2024, building on earlier legislation of the same series and making further changes to employment rules in Ontario. Below are some of the key developments that employers with personnel in Ontario should be aware of.

Effective November 21, 2024, Massachusetts employees may take earned sick time to “address the employee’s own physical and mental health needs, and those of their spouse, if the employee or the employee’s spouse experiences pregnancy loss or a failed assisted reproduction, adoption, or surrogacy.”  

Earlier this year, we highlighted that the Massachusetts Wage Act (the “Wage Act”), while providing powerful protections to Massachusetts workers, does not apply to a profit-sharing arrangement tied to an employer’s overall profits.  Now, another Massachusetts court—this time the District Court’s Appellate Division—has imposed an additional limitation in holding that the Wage Act does not apply to contingent retention bonuses.