June Legal Updates

Judge Rolls Back EEOC’s PWFA Reg

A federal judge in Louisiana struck down a Biden-era regulation that required employers to accommodate abortion under the Pregnant Workers Fairness Act (PWFA). The regulation, issued by the EEOC, interpreted abortion as a pregnancy-related condition deserving workplace accommodations. Judge Joseph ruled that the EEOC exceeded its authority, stating that Congress did not clearly authorize abortion accommodations in the PWFA, especially given the political and social sensitivity of the issue. 

The ruling came in response to lawsuits filed by Louisiana, Mississippi, and several Catholic organizations. Joseph emphasized that the PWFA was enacted shortly after the Supreme Court's Dobbs decision, which overturned Roe v. Wade, and argued that Congress would have explicitly included abortion if it intended to do so 

While the judge did not rule on religious freedom claims, he vacated the abortion accommodation requirement, except in cases where abortion is part of treatment for a pregnancy-related medical condition. The decision was praised by anti-abortion advocates and criticized by reproductive rights groups, who called it a setback for women's rights and workplace protections 

CO Deadnaming Transgender Law

Background: Colorado recently enacted House Bill 1312 (HB-1312), known as the "Kelly Loving Act," which expands anti-discrimination protections for transgender individuals. Among other provisions, it prohibits misgendering and deadnaming (using a transgender person’s former name) in public accommodations and legal contexts, treating such actions as discriminatory 

Just four days after the law was signed by Governor Polis, a coalition of conservative and parental rights groups — including Defending Education, Colorado Parent Advocacy Network, Protect Kids Colorado, Do No Harm, and a physician — filed a lawsuit in federal court. They argue that the law violates their First Amendment rights by compelling speech and punishing dissenting views on gender identity 

Key Claims:

• The plaintiffs claim the law infringes on their freedom of speech by preventing them from using names and pronouns that align with their beliefs.
• They specifically cite a transgender legislator they wish to refer to by a former name without legal consequences.
• The lawsuit draws on precedent from the 303 Creative Supreme Court case, which allowed a Colorado web designer to refuse services for same-sex weddings on First Amendment grounds 

The lawsuit targets the Colorado Civil Rights Division and Attorney General Phil Weiser. The case could lead to a significant legal battle over the balance between anti-discrimination protections and free speech rights.

EEOC’s Definition Of “Sex” Too Expansive

On May 15, 2025, a federal court in Texas ruled that the EEOC exceeded its legal authority by expanding the definition of “sex” in its 2024 Enforcement Guidance on Harassment in the Workplace. The court found that the EEOC’s interpretation—particularly its inclusion of gender identity-related issues such as bathroom access and pronoun usage—was inconsistent with Title VII of the Civil Rights Act and recent Supreme Court precedent. 

As a result, the court vacated those portions of the guidance nationwide. The EEOC, which had approved the guidance by a narrow 3-2 vote, is currently unable to revise or rescind it due to a lack of quorum. Acting Chair Andrea Lucas, who dissented from the original vote, remains opposed to the contested provisions.

In response to the ruling, the EEOC has marked the vacated sections on its website and is reviewing its materials to ensure compliance with the court’s decision 

EEO-1 Reporting Deadline

The deadline to file the 2024 EEO-1 Component 1 report is June 24, 2025. As part of the EEOC’s efforts to identify continued cost savings for the American public, there will be a shorter collection period during which filers may submit their 2024 reports. The collection period will not extend beyond the Tuesday, June 24, 2025 “Published Due Date” deadline.

All updates about the 2024 EEO-1 Component 1 data collection, including the 2024 EEO-1 Component 1 Instruction Booklet, may be found on the EEO-1 Component 1 dedicated website at www.eeocdata.org/eeo1.

Regarding DEI, Acting EEOC Chair Andrea Lucas said that "Title VII's protections apply equally to all workers, regardless of their race or sex" and that "there is no 'diversity' exception to Title VII's requirements."

"As you report data on your employees' race, ethnicity and sex, I want to take this opportunity to remind you of your obligations under Title VII not to take any employment actions based on, or motivated in whole or in part by, an employee's race, sex or other protected characteristics," Lucas wrote in a statement posted on the EEOC's data collection website. "Different treatment based on race, sex or another protected characteristic can be unlawful discrimination, no matter which employees or applicants are harmed." 

9^th Cir Upholds CA IC Test

The Ninth Circuit Court of Appeals upheld CA's Assembly Bill 5 (AB 5), rejecting a challenge from the Owner-Operator Independent Drivers Association (OOIDA). OOIDA had argued that AB 5, which makes it harder for companies to classify workers as independent contractors, violated the dormant Commerce Clause and the Equal Protection Clause of the U.S. Constitution.

Key points from the ruling:

• The court found no substantial burden on interstate commerce, stating OOIDA failed to provide evidence that AB 5 discriminates against or disadvantages out-of-state drivers.
• The ABC test codified by AB 5 presumes workers are employees unless the hiring entity can prove otherwise under three specific criteria.
• OOIDA also challenged the business-to-business (B2B) exception, claiming it unfairly exempts intrastate drivers. The court disagreed, noting the exception applies based on the nature of the business relationship, not geographic origin.
• The court emphasized that the law does not favor in-state over out-of-state drivers, nor does it prevent out-of-state drivers from working in California

DOL Reels Back Biden IC Rule

On May 1, 2025, the Wage and Hour Division (WHD) of the US DOL issued a Field Assistance Bulletin signaling a retreat from the stricter 2024 independent contractor rule. While the 2024 rule remains in effect, the DOL has instructed investigators to revert to a more lenient, business-friendly standard based on earlier guidance from 2008 and 2019.

Key Changes:

• 2024 Rule: Focused on whether a worker is economically dependent on the employer, making it harder to classify workers as independent contractors.
• New Enforcement Guidance: Returns to a traditional “economic realities” test, which is more flexible and considers multiple factors like:
  • Integration of work into the business
  • Duration of the relationship
  • Investment by the worker
  • Degree of control
  • Profit/loss opportunity
  • Market competition and initiative
  • Independent business operation

Implications:

• Effective Immediately: WHD investigators will use the older, more lenient test.
• 2024 Rule Still Exists: It hasn’t been repealed, so it can still be cited in private litigation.
• Pending Lawsuits: DOL has asked courts to pause five enforcement actions under the 2024 rule.

TX May Add Limits To Non-Competes in Healthcare Space

SB 1318, currently moving through the TX Legislature, proposes significant restrictions on non-compete agreements for healthcare professionals. If passed, it would take effect on September 1, 2025, and apply only to new or renewed contracts.

It would apply to:

• Physicians
• Dentists
• Nurses
• Physician Assistants
• Healthcare employers and organizations

Key Provisions:

1. Scope Expansion: Extends non-compete limitations beyond physicians to include dentists, nurses, and physician assistants.
2. Time Limit: Restrictive covenants would be limited to one-year post-employment.
3. Geographic Limit: Non-competes would be restricted to a five-mile radius from the provider’s primary practice location.
4. Buyout Clause: Requires a buyout option not exceeding the provider’s total annual salary and wages at the time of termination.
5. Patient Access: Maintains existing protections for physicians to access patient lists and records, though these do not yet extend to other healthcare practitioners.

The bill is currently waiting for House vote (after passing in the Senate).

VA Healthcare Workplace Violence Law

Signed into law by Governor Glenn Youngkin on March 24, 2025, this legislation requires most healthcare employers in VA to implement workplace violence prevention plans or reporting systems to enhance the safety of healthcare workers 

Key Requirements:

• Incident Reporting System: Employers must document, track, and analyze all incidents of workplace violence.
• Recordkeeping: Incident records must be maintained for at least two years.
• Quarterly Reporting: Data must be reported to the hospital’s chief medical officer and chief nursing officer at least quarterly.
• Annual Reporting: A summary report must be submitted to the Virginia Department of Health annually.
• Anti-Retaliation Policy: Employers must prohibit retaliation against employees who report workplace violence.
• Training & Prevention: The law encourages continuing education, de-escalation training, and risk identification as part of violence prevention planning.

Definitions:

• Workplace Violence: Includes any act or threat of violence against an employee while on hospital premises and performing job duties.
• Covered Employers: Includes hospitals and most healthcare facilities licensed under Virginia law 

MO Repeals PSL

Background:

• Proposition A, passed by MO voters in November 2024, established the MO Earned Paid Sick Time Law, which went into effect on May 1, 2025.
• The law required employers to provide paid sick leave and comply with notice and posting requirements starting April 15, 2025.

Legal Challenges and Legislative Repeal:

• On April 29, 2025, the Missouri Supreme Court upheld the law, rejecting challenges from business groups.
• Despite this, the Missouri Legislature passed House Bill 567 (HB 567) to repeal the law:
  • House passed it on March 13, 2025
  • Senate approved it on May 14, 2025
  • Governor Mike Kehoe is expected to sign it

Effective Date of Repeal:

• The repeal will take effect on August 28, 2025, because the bill lacks an emergency clause, which would have made it effective immediately. 

Implications for Employers:

• Employers must remain compliant with the law until August 28, 2025.
• Internal teams (Legal, HR, Payroll) should:
  • Prepare for policy and system updates
  • Communicate changes to employees
  • Monitor the MO Department of Labor for further guidance
• Employers should also watch for potential legal challenges to the repeal itself.

Broader Context:

• MO was one of three states (alongside Alaska and Nebraska) to pass paid sick leave laws via ballot initiative in 2024.
  • Alaska’s law takes effect July 1, 2025
  • Nebraska’s law takes effect October 1, 2025
• The repeal in Missouri raises questions about the future of similar laws in those states.

From USCIS Regarding E-Verify

E‑Verify recently experienced a technical issue with Social Security Administration (SSA) mismatch (tentative nonconfirmation) cases that were referred between April 9 and May 5, 2025. This includes cases involving dual SSA and DHS mismatches if the employee attempted to resolve the case by visiting an SSA office but did not contact DHS. 

Due to this system error, some of these cases may have incorrectly received a final nonconfirmation (FNC) even after the employee took steps to resolve the mismatch at an SSA office. 

Action Required:  

• For any cases that received an FNC after an SSA or Dual SSA and DHS mismatch, for cases referred from April 9 to May 5, 2025, please create a new E‑Verify case. 
• If you have already created a new case and received an Employment Authorized result for an affected employee, no further action is needed. 
• You may notice the status message “E‑Verify Needs More Time” appearing longer than usual for these cases on the Case Status page.  

Important: 

If you receive an FNC for one of these affected cases, do not take any adverse action and do not terminate employment based on that FNC result during this time. 

NOTE: E-Verify Customer Support is currently experiencing a high call and email volume. We appreciate your patience as we work to resolve this issue.