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Recently, the Federal Trade Commission (“FTC”) pursued a sweeping prohibition on employee noncompete agreements. That effort has now concluded. In early September 2025, the FTC formally abandoned its appeals and acquiesced to court orders vacating its proposed nationwide noncompete rule. The practical result is that noncompete agreements are once again governed primarily by a patchwork of state statutes and common law, with a renewed overlay of targeted federal enforcement when an agreement crosses the line into an unfair method of competition. While abandoning its appeals, the FTC has made clear that it views broad or indiscriminate noncompetes as harmful to worker mobility and competition and will seek to invalidate them under Section 5 of the FTC Act.

1. Attempted FTC Noncompete Ban And Texas Challenge

Beginning in 2024, the FTC, under prior leadership, advanced a rulemaking effort to prohibit most postemployment noncompete agreements nationwide. The final rule adopted in the spring of 2024 would have voided nearly all existing and future noncompete clauses for employees across nearly all industries. The rule marked a significant departure from the FTC’s traditional case-by-case enforcement posture and rested on the assertion that the FTC possessed substantive authority to define and ban categories of business conduct as unfair methods of competition.

Legal challenges followed immediately. In August 2024, the Federal Court for the Northern District of Texas set the rule aside before it could take effect. The court concluded the FTC lacked substantive rulemaking authority with respect to unfair methods of competition and held the rule was arbitrary and capricious. The court recognized the FTC only had authority to adopt rules of agency organization, procedure, or practice, and rejected the FTC’s attempt to use rulemaking to prohibit a broad class of business agreements. A separate federal court in Florida also blocked enforcement of the rule.

While the FTC initially noticed appeals in the Fifth and Eleventh Circuits, on September 5, 2025, the FTC formally withdrew its appeals. In a public statement, the FTC Chair characterized the final rule as overbroad and announced that FTC would return to policing noncompete agreements through targeted enforcement actions rather than through universal rulemaking.

2. Noncompetes Under Section 5 Of The FTC Act

Although the blanket federal rule is gone, the FTC stated it will continue to police noncompete agreements under 15 U.S. Code Section 45, also known as Section 5 of the FTC Act. Section 5 prohibits unfair methods of competition or deceptive acts affecting commerce. In determining whether an act is prohibited, the FTC uses a reasonableness analysis focused on duration after employment ends, the geographic reach, the scope of roles or industry covered, and most importantly whether the agreement is narrowly tailored to protect a legitimate business interest rather than to broadly restrain worker mobility.

The FTC said a noncompete is more likely to be viewed as fair when the obligation lasts one to two years, reaches only the territories where the employer operates or where the employee regularly worked, and confines the restriction to the employer’s line of business and the employee’s role. It is also material whether the agreement is deployed only for positions where the employer has a legitimate interest to protect such as trade secrets, long lead research and development, or substantial investments in training. On the other hand, the FTC warned noncompetes are likely unfair when they sweep far beyond two years, extend to territories where the employer does not operate or where the employee did not perform their duties, attempt to bar work in unrelated industries, or apply to low wage workers and others with limited access to sensitive information.

This has been exemplified in a recent action by the FTC against Gateway Services and its subsidiary Gateway US Holdings, Inc. The company reportedly required nearly all United States employees, including drivers, customer service representatives, and other hourly workers, to sign noncompete agreements that barred work anywhere in the country in the pet cremation industry for one year after employment ended. Those terms applied across the workforce regardless of access to sensitive information. The FTC determined that, while noncompetes may be appropriate for certain senior managers and employees with meaningful access to confidential information so long as the agreement is limited in time, place, and scope, the company’s blanked noncompete constituted an unfair method of competition.

3. Where Things Stand Now

The end of the rulemaking means employers are back in a world governed primarily by state law, with federal enforcement targeted at particular practices that the FTC considers unfair. In practical terms, employers should expect a case by case enforcement approach aimed at practices that are broad, indiscriminate, or difficult to justify. Agreements that apply to large numbers of low wage or hourly employees, or that are imposed without tailoring to role and responsibilities, are likely to draw attention.

Even without the federal rule, a number of states have enacted comprehensive prohibitions or significant limitations on noncompetes. Several states have effectively banned most noncompetes including California, Minnesota, North Dakota and Oklahoma. Other states have adopted salary or wage thresholds that preclude noncompetes for low income or hourly workers, such as Illinois and Nevada. Some states, such as Massachusetts and Colorado, have layered in procedural requirements such as early written notice. Employers should also be cautious about choice of law clauses that select jurisdictions viewed historically as friendly to noncompetes, as several states, like California, have moved to limit or refuse enforcement of foreign law and forum selection related to restrictive covenants.

Certain industries have also received heightened scrutiny. Healthcare has seen especially active legislation. In recent months, the states of Arkansas, Louisiana, Maryland, Pennsylvania, Utah, Texas, Indiana, and Wyoming have narrowed the circumstances in which healthcare employers can enforce noncompetes. Many states bar enforcement of noncompetes against physicians based on concerns about patient choice. Virginia recently prohibited noncompetes for employees who are eligible for overtime pay under the Fair Labor Standards Act.

There are also outliers moving in the opposite direction. For example, recent decisions in Delaware reflect growing reluctance to rewrite overbroad agreements. Florida enacted the Contracts Honoring Opportunity Investment Confidentiality and Economic Growth Act, which permits most noncompetes and allows for a postemployment period up to four years. The statute also requires courts to issue injunctions at the outset of disputes over covered provisions, a feature that dramatically shifts leverage in litigation.

4. Practical Considerations

The FTC has shifted away from its pursuit of a universal ban on noncompete agreements but remains focused on scrutinizing those that unjustifiably restrict worker mobility. In response, employers should elevate the quality of their agreements by carefully identifying roles where noncompetes are essential, ensuring terms such as duration and geography are reasonable and defensible, and aligning with both state law and FTC guidance. Employers should consider removing noncompetes from lower wage positions or roles with limited access to confidential information. Documenting the legitimate interests behind each agreement, like safeguarding trade secrets or protecting substantial investments in training, and opting for less restrictive alternatives when possible, such as nondisclosure or nonsolicitation provisions, will help support their use.

Employers must also ensure compliance with varying state laws, particularly regarding pay thresholds, role carveouts, and notice requirements, and be mindful of heightened risks in certain sectors such as healthcare. Agreements should be regularly reviewed for enforceability, especially where remote or distributed workforces are involved, confirming the correct application of state law. With federal scrutiny increasing and the FTC actively pursuing feedback and enforcement, employers should prepare to justify and demonstrate tailored, fair agreements, and discontinue those that are purely anticompetitive.

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About The Author

Luke Bickel is an attorney in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s San Diego (Del Mar) office. Mr. Bickel defends employers of all sizes in matters involving discrimination, retaliation, harassment, wrongful termination, and wage and hour. He has experience defending all aspects of employment-related claims, from single plaintiff to class and PAGA matters, in state and federal court. Beyond the realm of litigation, Luke advises clients on employment issues ranging from wage and hour compliance to federal OSHA and Cal/OSHA investigations. Luke’s experience also includes helping clients obtain workplace violence restraining orders and conducting workplace investigations.

Luke is a consistent contributor to Sheppard Mullin’s Labor & Employment Law Blog, Trade Secrets Law Blog, and the California Labor and Employment ALERT.

Mr. Bickel received his law degree from the USC Gould School of Law and his undergraduate degrees from Cal Poly State University, San Luis Obispo, magna cum laude.

California law imposes numerous requirements on employers, including minimum wage and paid sick leave rules, among others. It also allows employees to enforce their rights by bringing lawsuits in court, but that is not their only recourse. In some instances, employees pursue administrative claims before the California Labor Commissioner under a cost-free vehicle, called the “Berman process.” Employees have access to this administrative process without the need to retain an attorney or incur any legal fees. When employees pursue such claims, the losing party has the opportunity to appeal the decision to the superior court.

1. The Supreme Court’s Iloff Decision

These issues converged in the Supreme Court’s August 21, 2025 decision in Iloff v. LaPaille, __ Cal. 5th __ (2025), a case initiated by a maintenance worker (Iloff) against Bridgeville Properties and a manager, Cynthia LaPaille (together, the “employers”). Iloff lived rent-free in a house owned by his employers and performed maintenance services under the employers’ directions. He was not provided any benefits or compensation for his services. When the relationship ended, Iloff brought an action against the employers with the Labor Commissioner, initiating the Berman process for adjudicating wage claims.

In response to Iloff’s claim, the employers argued he was an independent contractor. The Labor Commissioner disagreed. It issued an “order, decision, or award” finding Iloff was an employee and, as such, was entitled to unpaid wages, liquidated damages, penalties, and interest.

The employers appealed, seeking review of the ruling in the superior court under Labor Code Section 98.2. In response, Iloff – who was now provided free representation by an attorney from the Labor Commissioner’s office, filed a notice of claims. In the notice, Iloff reasserted the wage claims he had raised before the Labor Commissioner and added new claims, including a claim for penalties under California’s paid sick leave law in Labor Code Sections 245 – 249.

2. The Supreme Court Addressed Two Questions

The Supreme Court examined two issues. First, it considered whether the employers were liable for “liquidated damages” (a form of double damages) based on their minimum wage violations. Second, it addressed the question whether the employee could add new claims, such as a paid sick leave claim, after the employer appealed the Labor Commissioner’s ruling.

The Supreme Court concluded that the employers were vulnerable to an award of liquidated damages for the minimum wage claims because they had no defense. They did not establish a “good faith” defense to liquidated damages by showing they took reasonable steps to comply with their minimum wage obligations. It stated that mere “ignorance of the law” was insufficient to negate such an award.

Notably, the Supreme Court recognized for the first time that no “private right of action” existed to seek administrative penalties under California’s paid sick leave law, Labor Code Section 248.5. Nevertheless, the Supreme Court reasoned that a Berman appeal is not a “private right of action.” Instead, it is a procedure for de novo reconsideration of the Labor Commissioner’s ruling in the administrative stage of the Berman process. Thus, even though the employee did not have a private right of action allowing him to file a paid sick leave claim directly in court, he could pursue a paid sick leave claim (or another wage claim) as part of his response to his employer’s appeal.

3. The Minimum Wage And Liquidated Damage Claims

a. Employers Must Take Reasonable Steps To Comply With The Minimum Wage Law To Establish Good Faith

Because the employers did not pay Iloff any compensation for his services, they were liable for minimum wage violations. The next question was whether they were also liable under Labor Code Sections 1194-1194.2 for liquidated damages in an amount equal to the wages unlawfully unpaid, i.e., double the minimum wage liability. Based on the Labor Code, liquidated damage liability must be imposed unless the employer establishes a “good faith” defense under Section 1194.2(b).

The Supreme Court stated, “When a court finds an employee is entitled to unpaid minimum wages, . . . , the court must award the employee ‘liquidated damages in an amount equal to the wages unlawfully unpaid and interest thereon.’” The employer then has the burden “to establish the defense by proving that ‘the act or omission giving rise to the action was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation.’ (Ibid.) If the employer carries this burden, the provision authorizes the court, ‘as a matter of discretion’ to deny a request for liquidated damages or order less than the full amount to which the employee would otherwise be entitled.”

b. Employers Must Attempt To Determine Their Minimum Wage Obligations

As explained by the Supreme Court, the employer must show that it made (1) a reasonable attempt to determine the requirements of the law governing minimum wages and (2) a good faith effort to comply with those requirements. In the case before it, the employers failed to meet the standards because they did not show they made any attempt to make certain they met their minimum wage obligations. The employers’ independent contractor defense was developed in response to the claim, not because the employers had looked into their minimum wage obligations earlier.

When an employer has made a reasonable effort to determine the requirements of the law governing minimum wages, a court may consider evidence of the nature of the parties’ relationship, e.g., whether there was an independent contractor relationship, their agreements with each other, and the legal landscape in determining whether the employer made a good faith effort to comply with those requirements. However, where, as here, the employers did not show they made ‘any attempt to determine whether their arrangement with Iloff complied with the law governing minimum wages, they could not rely on arguments regarding the unsettled state of the law to prove that they acted in good faith in failing to comply with its requirements.

c. Neither Ignorance Of The Law, Nor Waivers Are Substitutes For “Good Faith”

The Supreme Court also refuted other proposed defenses. It determined it did not matter whether an employee agreed to be paid less than the minimum wage because the right to minimum wages cannot be waived. Finally, it recited the age-old adage that “ignorance of the law is no excuse.” Consequently, the fact that the employers did not understand they were required to pay Iloff the minimum wage was not a defense, as “ignorance alone” does not prove good faith. Again, an employer must show it made a reasonable attempt to determine the requirements of the minimum wage law. Because the employers did not make this showing, Iloff was entitled to an award of liquidated damages.

The Supreme Court added emphasis to its holding, making it clear that, to establish the “good faith” defense to liability for liquidated damages under Labor Code Section 1194.2(b), an employer must show that “it made an attempt to determine what the law required. . . . While the form and extent of the required attempt is context dependent, the burden is on the employer to show it made an attempt to determine what the law required that was reasonable under the circumstances and a good faith effort to comply with the requirements of the law.”

4. Employees Can Raise Paid Sick Leave (Or Other Wage) Claims If An Employer Appeals A Labor Commissioner Ruling

a. Iloff’s Paid Sick Leave Claim

The second question addressed by the Supreme Court relates to the paid sick leave law, the Healthy Workplaces, Healthy Families Act, Labor Code §§ 245, et seq. The Act requires California employers to provide employees paid leave from work for health-related reasons or to care for sick family members.

Although Iloff did not allege a violation of the Act in his initial claim before the Labor Commissioner, he raised a claim for penalties in the notice of claims he filed in the superior court in response to his employers’ appeal of the Labor Commissioner’s ruling. The question was whether the superior court may consider a paid sick leave claim raised in this manner. The Supreme Court determined that it could.

b. Employees Can Raise New Sick Leave Claims If Employers Appeal

As a preliminary matter, the Supreme Court agreed the law authorizes employees to raise paid sick leave claims before the Labor Commissioner, which has authority to adjudicate such claims under Labor Code Section 248.5. However, it disagreed with the court of appeal’s conclusion that an employee may not raise a new claim in response to an employer’s appeal from the Labor Commissioner’s ruling.

It previously held in Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1004 (2007), that a superior court can allow an employee to raise additional claims (such as additional wage claims) that the Labor Commissioner did not consider during the Berman process. It was therefore easy to extend the Murphy decision to paid sick leave claims.

c. A Berman Appeal Is Not A Private Right Of Action

The Supreme Court concluded “there is no private right of action to seek administrative penalties under section 248.5.” Citing Seviour-Hoff v. LaPaille, 80 Cal.App. 5th 427, 450 (2022), there is nothing in the Section 248.5 that “indicates a private right of action.” A Berman appeal, however, “is not a private right of action. Instead, it is a procedure for de novo reconsideration of the Labor Commissioner’s ruling in the administrative stage of the Berman process.” The Supreme Court added, “[w]ithout a private right of action, employees are left with the Berman process as their sole avenue for vindicating their rights under the Paid Sick Leave Law. See Wood v. Kaiser Foundation Hospitals (2023) 88 Cal.App.5th 742, 757.”

In short, an employee can raise a paid sick leave claim either directly in a Labor Commissioner claim or in response to the employer’s appeal of the Labor Commissioner’s ruling. The Supreme Court then commented about PAGA claims in a footnote, stating that Wood held Section 248.5 does not preclude an employee from bringing a PAGA action based on a failure to comply with the paid sick leave law; however, as proxy of the labor law enforcement agencies in a PAGA action, the employee may recover “only civil penalties” that would otherwise be assessed and collected by the state.

5. Conclusion

The Iloff decision addresses issues that appear fairly limited in scope and significance in an era marked by massive class action and PAGA litigation. Instead of cases that dissect claims involving hundreds or thousands of individuals, Iloff focused on a Labor Commissioner hearing resolving a minimum wage and liquidated damages claim of a single maintenance worker who was not paid any benefits or compensation, but was provided rent-free housing. In an unanimous decision, the Supreme Court disagreed with the court of appeal’s conclusion that the employers qualified for the good faith defense to liquidated damages. It returned the case to the lower court to take further proceedings consistent with the decision.

One can only wonder how the legal fees engendered by the litigation compared to the wages Iloff was eventually awarded. From a philosophical perspective, it would have been far less expensive for the employers to have investigated their legal obligations before entering into the working relationship rather than seeking to dig themselves out of a legal hole for years.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

On August 15, 2025, in State of Texas v. Bondi, the Fifth Circuit Court of Appeal overturned a decision from a Texas district court that previously found the Pregnant Workers Fairness Act (“PWFA”) to be unconstitutionally enacted.

As background, the PWFA is a federal law enacted in 2022 that aims to protect pregnant workers or workers who have conditions tied to pregnancy and childbirth by requiring employers with 15 or more employees to offer reasonable workplace accommodations to such employees. The law also prohibits discrimination or retaliation against these employees. The law covers not only pregnancy but also related medical conditions, such as morning sickness, gestational diabetes, and postpartum depression.

The PWFA became law in December 2022 after passing in both the House and the Senate as an amendment to the Consolidated Appropriations Act (a $1.7 trillion bill). The bill was passed using a pandemic-era rule that allowed lawmakers to vote remotely by proxy.

The PWFA went into effect on June 27, 2023.

In February 2023 (before the law took effect), the State of Texas filed a lawsuit against the federal government, challenging the federal government’s omnibus spending package and specifically targeting two provisions of the bill: enactment of the PWFA and funding for unauthorized immigrant social services. The State of Texas focused its lawsuit on the U.S. Constitution’s quorum clause, which requires a majority of members of the House or Senate to be present in order to constitute the necessary quorum to pass legislation.

In February 2024, a federal judge in Texas agreed with the State of Texas and blocked the EEOC from enforcing the PWFA against the State of Texas. Specifically, the judge ruled that the law could not be enforced against the State because the House did not have a proper quorum when it passed the Consolidated Appropriations Act in 2022. The judge ruled that the remote voting by proxy violated the Constitution’s quorum clause.

With this 2024 ruling, the judge issued a permanent injunction, barring the federal government from filing suits under the PWFA against the State of Texas. The injunction would also block the EEOC from accepting state employees’ charges alleging violations of the PWFA, investigating those charges, issuing right-to-sue letters or suing on behalf of employees. The injunction however would not block state employees in Texas from filing suits under the PWFA and did not impact private employers.

This decision was appealed to the Firth Circuit, which held that House lawmakers did not need to vote in person to have a quorum under the Constitution, and that the district court judge adopted an improper interpretation of the quorum clause in ruling that the bill required the physical presence of a majority of House members when it was passed. The Fifth Circuit explained that the constitutional text, history, and tradition indicate that the quorum clause does not contain a physical-presence requirement.

With this decision, the EEOC’s ability to enforce the PWFA against the State of Texas is restored and the decision makes clear that covered employers, both public and private, must comply with the PWFA. Thus, employers must make sure their accommodation policies and related policies address pregnancy-related needs and also take into account medical conditions related to pregnancy.

Those seeking a more in-depth understanding of the PWFA and pregnancy discrimination are invited to read Chapter 5 of the Employment Discrimination and EEO Practice Manual for California Employers by Attorney Richard J. Simmons of Sheppard Mullin. The Manual is available from Castle Publications.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Rachel Patta Howard is an associate in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s Century City office. Ms. Howard represents employers in a variety of industries including financial services, banking, retail, healthcare, manufacturing, and entertainment. She has successfully litigated and favorably resolved cases involving allegations of discrimination, retaliation, harassment, failure to accommodate, wrongful termination, trade secret misappropriation, and defamation, as well as wage and hour cases, including representative and class actions. Additionally, Rachel advises and counsels clients on day-to-day employment issues including internal investigations, discipline and terminations, leaves of absence, the interactive process, reasonable accommodations, personnel policies, and other wage and hour compliance issues.

She has written a number of articles for the Sheppard Mullin Labor and Employment Blog and is a contributing author of the ALERT Newsletter.

Ms. Howard received her law degree, as well as her undergraduate degree, from the University of California, Los Angeles.

July 1, 2025 marked one year since the amendments to the Private Attorneys General Act (“PAGA”) took effect. Enacted as a compromise to avoid a proposed November 2024 ballot initiative that would have repealed PAGA, the reforms were the result of negotiations between Governor Newsom, labor groups, and business groups. The stated purpose of the amendments was to curb perceived abuses and restore PAGA’s original mission of supplementing state labor enforcement. However, they continue to spark debate as PAGA case filings remain high and the state pushes back against improper tactics.

1. Background

It is no secret that PAGA had been used by some plaintiffs’ attorneys for years as a tool to pursue claims for civil penalties, often with only a tenuous connection to the named plaintiff. As noted by the Legislature itself, this structure invited manipulation by trial attorneys who saw PAGA as a “money-making scheme” rather than a mechanism to bolster labor law compliance. The Court of Appeal in Williams v. Alacrity Solutions Group, LLC, 110 Cal.App.5th 932, 944 (2024), highlighted this concern, observing that the 2024 amendments were enacted because PAGA’s goal to “bolster labor law enforcement” had been “manipulated over its 20-year history by certain trial attorneys as a money-making scheme.”

2. Mechanics Of The Reform

The 2024 reforms enacted on July 1, 2024, introduced a series of targeted amendments to address these concerns. Among other changes, the legislation:

• Increased the employees’ share of PAGA penalties from 25% to 35%;

• Placed caps on penalties for employers who proactively audit, fix, or cure Labor Code issues, with further reductions if they act after receiving notice;

• Limited standing to plaintiffs who actually suffered the alleged violations within the one-year limitations period;

• Created early resolution and cure processes, including special pathways for small employers and a neutral evaluation process for larger employers; and

• Granted trial courts greater authority to manage overlapping or complex PAGA claims.

3. Trends Since The Reform

The amendments did not discourage attorneys from filing claims in batches. In 2024 alone, over 9,400 notices were filed – an all-time record. Critically, from July 1, 2024 through June 2025, nearly 8,800 more notices were filed, amounting to roughly 25 new filings each day. Many of these notices allege broadly stated Labor Code violations without providing sufficient factual details.

In response, the Labor and Workforce Development Agency (“LWDA”) has issued pointed warnings to several plaintiffs’ firms. For example, in February 2025, the agency directed one firm to amend dozens of notices after finding “numerous boilerplate PAGA notices containing seemingly frivolous allegations.” It warned that a continued pattern could result in State Bar referral. Similarly, in April 2025, the LWDA admonished another firm, observing that out of 102 PAGA notices filed by a single attorney in under a year, nearly all appeared to be copied from class action pleadings with no supporting facts.

These agency warnings reinforce the Legislature’s goal of discouraging “professional PAGA plaintiffs” and their counsel from flooding the courts with cookie-cutter claims. Yet, given the still-elevated filing numbers, it remains to be seen whether these efforts will meaningfully reduce meritless litigation in the long run.

4. Looking Ahead

Even after a year, the full impact of the 2024 PAGA amendments remains uncertain. Many of the new provisions are so complex and poorly drafted, they necessitate interpretations by courts and attorneys alike. Employers are working to understand these reforms and whether they help in defending or narrowing PAGA claims.

At the same time, the LWDA’s unchecked criticism of vague, template-style allegations marks a positive step. Employers should consider how to utilize the agency’s stated concerns about boilerplate notices when challenging litigation filed after the reforms took effect. Courts are also likely to continue testing whether a plaintiff’s “aggrieved employee” status is supported by a timely, individualized claim that the plaintiff suffered each alleged violation. This is consistent with the stricter standing requirements imposed by the amendments.

In this evolving post-reform landscape, proactive compliance measures, thorough audits, and a clear litigation strategy to challenge deficient PAGA claims remain employers’ best tools to minimize exposure.

Those seeking a more in-depth analysis of the new PAGA reform legislation are invited to read the new 2025 California’s Private Attorneys General Act (PAGA) Litigation and Compliance Manual by Sheppard Mullin Attorneys Richard J. Simmons, Ryan J. Krueger, and Tyler J. Johnson. Readers can learn to identify high risk areas, audit their policies and practices, understand PAGA litigation, and implement proactive measures to reduce exposure to liability. The Manual will be available soon from Castle Publications.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Ryan J. Krueger is a Partner with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Los Angeles office. He specializes in labor and employment matters on behalf of employers, including wage and hour violations, employment discrimination, wrongful termination and sexual harassment. Mr. Krueger has experience in all aspects of employment litigation, including brief writing and oral argument, taking and defending depositions, and negotiating settlements. He has also second chaired multiple trials and arbitrations, and argued before the California Court of Appeal. Mr. Krueger also regularly counsels employers regarding California and federal employment law issues.

Ryan is a co-author of the California’s Private Attorneys General Act (PAGA) Litigation and Compliance Manual, and is a frequent contributor to the California Labor and Employment ALERT Newsletter. He is a co-speaker at the Castle Publications’ Seminars as well as the Labor Law Update for Sheppard Mullin.

He received his J.D. from the University of California, Los Angeles and his B.A. from the University of Wisconsin, with distinction. During law school, Mr. Krueger served as extern to the Honorable Morton Denlow, U.S. District Court for the Northern District of Illinois. He is admitted to practice in all California state courts, along with the United States District Court for the Central District of California and the Ninth Circuit Court of Appeals.

A former high school teacher brought a 42 U.S.C. § 1983 action against her school district and board members, alleging that her termination for posts on a social networking site violated the First Amendment. In Hedgepeth v. Britton, No. 24-1427, 2025 WL 2447077 (7th Cir. Aug. 26, 2025), the U.S. Court of Appeals for the Seventh Circuit affirmed summary judgment for the school district, holding that the termination did not violate the First Amendment because the teacher’s “inflammatory” Facebook posts caused widespread disruption in the school community and beyond. Emphasizing both the substantial fallout from her posts and her prior disciplinary history, the panel concluded that the school district’s efficiency interests outweighed her speech interests.

1. Background

Jeanne Hedgepeth had taught social studies at Palatine High School for twenty years before her dismissal in 2020. The termination followed a series of Facebook posts made during the height of national protests, expressing controversial opinions and vulgar suggestions. Her posts—visible to an audience comprised of roughly 80% former students—elicited more than 130 complaints, media attention, and public criticism, disrupting the Palatine High School community and forcing the school district to divert significant resources to address the situation. Hedgepeth’s speech followed two prior disciplinary suspensions, both involving profanity aimed at students and violations of school district policies regarding professional conduct.

After her termination, Hedgepeth first requested an Illinois State Board of Education review hearing. While that administrative matter was pending, she filed a Section 1983 action against the school district and individual board members. After discovery, the district court granted summary judgment for defendants, holding Hedgepeth was collaterally estopped by the state administrative proceedings and, alternatively, that her First Amendment claim failed on the merits. She appealed.

2. The Court’s Legal Analysis

The panel framed the dispute under the public-employee speech doctrine. Public employees do not “relinquish their First Amendment rights as a condition of entering government service.” Instead, “the First Amendment protects a public employee’s right, in certain circumstances, to speak as a citizen addressing matters of public concern.” But just like “private employers, the government needs to exercise control over its employees to provide public services effectively,” so public employees still have “certain limitations on [their] freedom,” which may be particular to that employee’s role and whether it is a public-facing role of “trust.”

There was no dispute that Hedgepeth spoke as a citizen on matters of public concern; thus the question was whether the district’s interest in “promoting the efficiency of the public services” outweighed her speech interest under balancing-interests test from Pickering v. Board of Education, 391 U.S. 563, 568 (1968). The court reiterated that the employer bears the burden and that the oft-cited seven factors are guideposts, not a “straitjacket,” with the touchstone in the school context being “the effective functioning of the public employer’s enterprise.”

Framing the inquiry around the “effective functioning” of the school system, the court held the school district met its burden to show that its operational interests outweighed Hedgepeth’s speech interests. The record contained undisputed evidence that her posts “threw school and district operations into disarray,” unsettled classrooms, derailed summer school discussions, drew local and international media attention, and forced a costly, time-consuming public relations response that diverted staff and resources. In the court’s view, these concrete impacts on work, personnel relationships, and instructional programs squarely implicated the employer’s efficiency interests.

Context carried substantial weight as well. Hedgepeth was a public-facing educator in a position of trust, which affords school employers greater leeway when speech undermines effectiveness and public confidence. The school district also properly considered her two prior suspensions and explicit warnings for similar decorum violations; it was not required to “wait around for a fourth violation,” and could account for both actual and reasonably predictable disruption supported by evidence.

As for Hedgepeth’s numerous alleged defenses, the court rejected her reliance on nominal Facebook privacy: with roughly 80% of her curated audience tied to the PHS community, any claim to private speech was “illusory.” Her posts, “though not technically public, functioned more like a stage whisper than a secret,” predictably circulating among students and faculty and shaping perceptions of her as a teacher. The court also declined to treat the case as a “heckler’s veto.” Students, parents, and staff are essential participants in public education, not outsiders seeking to silence speech, and the school district responded to disruption, not viewpoint. Nor did the speech gain added protection from “special knowledge” or whistleblowing value; by her own account, the posts were jokes or shared views, and her vulgar tone weakened her interest given her role-model responsibilities. On this record, the scale and timing of the fallout created an “insurmountable barrier” to the learning environment, and the court concluded her posts were not protected in this public-employment context.

3. Practical Considerations

Hedgepeth underscores that First Amendment defenses will not insulate off-duty social media speech where employers can demonstrate contemporaneous, objective disruption to operations. Employers should maintain a concrete record of internal complaints, instructional or workflow impacts, diversion of staff and public-relations resources, media attention, and evidence-based forecasts of further disruption. Role and context are decisive: public-facing, trust-dependent positions—particularly where prior discipline and explicit warnings exist—afford greater latitude for employer action when speech undermines effectiveness, workplace relationships, or public confidence. Posts shared with stakeholder-heavy audiences should be treated as effectively public when amplification is foreseeable. Disciplinary decisions should be grounded in operational disruption and policy violations, not viewpoint, and implemented pursuant to clear, consistently enforced social media and decorum policies through a thorough, documented process. Timing is critical: prompt, well-supported action tied to imminent operational needs is more likely to withstand scrutiny.

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About The Author

Rachel Schuster is an associate in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s San Diego (Del Mar) office. Ms. Schuster defends employers of all sizes in a broad range of employment matters, including claims of discrimination, retaliation, harassment, wrongful termination, wage and hour disputes, and contract issues. She has experience handling single-plaintiff lawsuits, class actions, and PAGA cases in both state and federal courts, as well as representing clients in mediation and arbitration. In addition to her litigation practice, Rachel conducts workplace investigations, conducts employment law training sessions, and advises employers on compliance with wage and hour laws, Cal/OSHA regulations, and other employment-related requirements. She drafts, reviews, and updates employee handbooks and workplace policies to ensure legal compliance and best practices.

She has written a number of articles for the Sheppard Mullin Labor and Employment Blog and is a contributing author of the ALERT Newsletter.

Ms. Schuster received her law degree, as well as her undergraduate degree, from the University of California, Berkeley.

On September 19, 2025, the White House issued a Presidential Proclamation imposing a $100,000 filing fee for certain H-1B workers.

The advent of this Proclamation has created a lot of uncertainty. The Department of Homeland Security (“DHS”) issued some initial clarifying guidance on September 20, 2025, but we are hopeful that more guidance will ensue.

Several groups have already announced that they intend to challenge the legality of the Proclamation, since USCIS filing fees must bear a reasonable relationship to the cost for the agency to provide that service and the agency must also first publish them in the Federal Register.

1. Key Takeaways, In The Interim

1. We are still waiting for more agency guidance as to whether the Presidential Proclamation of Sept 19, 2025 only applies to new H-1B lottery petitions starting in April 2026 and that designate consular processing for brand new workers that are still overseas.

2. The U.S. Citizenship and Immigration Services (“USCIS”) and U.S Customs and Border Protection (“CBP”) issued memos on September 20 indicating that the $100,000 fee only applied to new petitions filed on or after September 21, 2025. However, the memos were silent on all other issues.

3. The White House press secretary issued a clarification on X on September 20 indicating that the fee will first apply to H-1B lottery cases starting in April. See the X posting below.

4. Petitions filed before September 21, 2025 should not be impacted, nor should H-1B travel or visa stamping be impacted at this time for petitions that were filed prior to that date.

5. The USCIS website makes no mention of any $100,000 filing fee for any H-1B petition filing. Indeed, at this time there appears to be no way to even pay the fee if it were required.

6. H-1B workers with petitions filed before September 21, 2025 should be able to travel abroad and return with a valid H-1B visa stamp and passport based on the White House posting on X and the agency memos from September 20. And to date we have not heard of any H-1B workers having difficulty returning to the U.S.

7. Non-lottery petitions filed on or after September 21, 2025 might incur a $100,000 filing fee but the guidance on this question is unclear. Therefore H-1B workers who are the beneficiary of a new petition filed on or after September 21, 2025 should not travel abroad at this time until more guidance is given by the federal agencies.

8. It also remains unclear how the Courts will look at this Proclamation and subsequent agency actions – whether it is within the Executive Branch’s authority or only that of Congress.

9. Assuming the Courts uphold most or all of the Proclamation, it also remains unclear whether the Secretary of Homeland Security will use the discretion granted to her in the Proclamation to exempt certain industries, companies, or individuals from the $100,000 filing fee on the basis of national interest.

10. While there is no guarantee, this is what we know about the new fee at this time. It could change. We will keep readers apprised as developments occur.

2. White House Clarification Posted On X On September 20

To be clear:

1.) This is NOT an annual fee. It’s a one-time fee that applies only to the petition.

2.) Those who already hold H-1B visas and are currently outside of the country right now will NOT be charged $100,000 to re-enter.

H-1B visa holders can leave and re-enter the…

— Karoline Leavitt (@PressSec) September 20, 2025

3. Additional Guidance And Commentary

• While not a certainty, it appears the primary intent of the Proclamation is to target IT workers who are overseas and hope to be selected in the March 2026 H-1B lottery. If they are overseas and their visa number is selected in the lottery, then the employer will have to file an I-129 petition, indicate consular processing, and pay the $100,000 filing fee prior to filing the petition.

• When Congress created the H-1B program in 1990, it did not tie it to proving that there was a shortage of U.S. workers. At the time there was a known shortage of IT workers, so Congress only mandated that the position require a 4-year degree related to the duties of the position and that wages would not adversely affect U.S. workers. Congress also set an annual quota on the number of new H-1B visa holders.

• The Proclamation also directs the Department of Labor (“DOL”) to review and prioritize H-1B petitions and visas for the most highly skilled and highly paid workers. The lottery will give four selection opportunities for a position where the employer is willing to pay a Level 4 wage, three selection opportunities for a Level 3 wage offer, etc. The Proclamation cites the H-1B Labor Condition Application (“LCA”) requirement as outlined in 8 U.S.C. 1182(n). The congressional statute cited in the Proclamation requires that H-1B wages be on par with what U.S. workers are being paid for the same position and job requirements and that the H-1B wage not adversely impact U.S. worker wages.

• Limiting the H-1B lottery program to only the highest paid and highest skilled workers may thwart the intent of Congress which limited the H-1B program to professional occupations involving at least a relevant 4-year degree. Therefore, this area seems ripe for litigation as Congress wrote in the statute that the program must protect American wages, but it did not require that only the highest skilled and highest paid workers (“Level 4”) be accepted. On the other hand, if the White House feels that U.S. wages are being adversely affected by the current H-1B lottery selection method, the Courts could uphold the new H-1B lottery selection method.

• It is also likely that the DOL will attempt to increase the prevailing wage for all H-1B petitions (including not lottery petitions) and start commencing more H-1B wage and hour audits to determine if employers are paying at least what the agency believes is the correct prevailing wage level for the position.

• It remains to be seen how this will play out. Since the DOL sets the 4 level prevailing wage already, the presumption is they are already accurate and protecting U.S. workers. https://flag.dol.gov/wage-data/wage-search

4. Conclusion

The intent of the Proclamation is primarily to stem the future flow of IT workers from overseas, which the Administration feels causes U.S. wages to drop and is leading to rising unemployment in this sector. Also, generally employers should expect to pay higher wages to H-1B workers in the future.

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About The Authors

Greg L. Berk is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. He leads the Firm’s immigration practice and is a Certified Specialist in Immigration and Nationality Law by the State Bar of California Board of Legal Specialization>. He has over 25 years of experience advising on all aspects of U.S. immigration matters. He assists employers worldwide with the hiring and retention of foreign national executives and highly talented individuals that are needed in their U.S. workforce. He also works with investors on E-2, L-1, and EB-5 matters. He also handles I-9 and other immigration compliance matters.

Greg frequently lectures on immigration issues and is a regular contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law blog. Mr. Berk received his J.D. from Western State University College of Law, his M.B.A. from George Washington University and his B.A. from California State University.

Jonathan Meyer is a Partner in the Governmental Practice Group with the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Washington DC offices. He counsels clients on their interactions with federal and state government, as well as national and homeland security, Congressional oversight, cybersecurity, AI, high tech, and transportation security, among other issues.

Prior to returning to Sheppard Mullin, Jon was nominated by President Biden and confirmed by the Senate as the Sixth General Counsel of the U.S. Department of Homeland Security, serving from 2021 to 2024.

Jon is regularly sought out by the media – including CBS News, NPR, The Wall Street Journal, The New York Times, The Washington Post and Politico – on issues including national security, homeland security, government investigations, cybersecurity, immigration, politics and Congress.

On May 1, 2025, the U.S. Department of Labor’s (“DOL”) Wage and Hour Division announced it would not enforce or apply the Biden-era 2024 Final Rule regarding independent contractor classification (“2024 Rule”). Specifically, the DOL directed its investigators “not to apply the 2024 Rule’s analysis” in enforcement matters. The DOL’s announcement will undoubtedly make it easier to classify workers as independent contractors at the federal level—and continues a seesaw of regulatory pull-back from Biden-era directives. While the 2024 Rule does remain in effect for private litigation and certain state-specific tests still impose higher worker classification standards than the current federal guidelines, the DOL’s announcement bodes well for employers seeking to classify workers as contractors under federal law. However, it does not affect the status of workers under state law, such as California’s AB 5.

1. The 2024 Rule

Under the 2024 Rule, classifying workers as independent contractors was somewhat akin to threading a needle. Imposed on March 15, 2024, the 2024 Rule mandated a complex, employee-friendly analysis that focused on a holistic review of the “totality of the circumstances” to ascertain whether a worker was “economically dependent” on an employer and, therefore, not an independent contractor. These six factors included:

1. The nature and degree of an employer’s control over the worker;

2. The worker’s opportunity for profit or loss;

3. Any investments by the workers and the employer;

4. The degree of permanence of the working relationship;

5. The extent to which the work performed is integral to the employer’s business; and

6. The amount of specialized skill and business initiative required.

Under the 2024 Rule, no factor was assigned more weight than another. Thus, the 2024 Rule was commonly referred to as the “totality of the circumstances” test. The net result was a high degree of both difficulty and uncertainty for employers seeking to classify workers as independent contractors.

2. Legal Challenges To The 2024 Rule

Business groups quickly challenged the 2024 Rule in courts across the country. At present, five lawsuits are pending. In each, the main argument is that the 2024 Rule was arbitrary, capricious, and imposed an undue burden on businesses. No court has halted or enjoined the 2024 Rule. While the Biden-era DOL mounted a vigorous defense in each case, the current DOL’s retreat from the 2024 Rule renders the ultimate outcome of these cases unclear. For example, in one case pending before the Fifth Circuit (Frisard’s Transp., LLC v. United States), the Court of Appeals stayed the proceeding after the government submitted a status report noting the DOL was in the process of reconsidering the 2024 Rule-at-issue in the litigation. Ultimately, the DOL’s pivot to the more lenient standard could have massive implications for these proceedings.

3. The DOL Retracted The 2024 Rule

In its May 1 announcement, the DOL directed investigators to analyze a worker’s status under the longstanding “economic reality” test, described in the DOL’s 2008 Fact Sheet 13 and 2019 Opinion Letter. The more traditional economic realities test looks at various factors to determine whether workers are actually in business for themselves (and therefore contractors) or dependent on the hiring entity (and thus an employees). These factors include:

1. Whether the work is integral to the hiring entity’s business;

2. The permanency of the parties’ relationship;

3. The contractor’s investments in facilities or equipment;

4. The degree of control by the hiring entity over the contractor;

5. The contractor’s opportunity for profit or loss;

6. The amount of independent judgment or initiative required in marketplace competition for the contractor to succeed; and

7. The degree of independence with which the contractor organizes and operates their business.

This traditional economic reality test is widely considered more employer-friendly. It is highly-likely that the DOL under President Trump will issue new, formal rulemaking on the subject in the near future.

4. Practical Considerations

Regardless of the DOL’s announcement, employers should remain careful and ensure they comply with other applicable classification rules; which greatly vary by jurisdiction.

For example, many state laws establish classification standards that are stricter than the federal guidelines. California uses the much stricter “ABC test” to determine whether a worker is an independent contractor. Under that test, employers must prove (1) a worker is free from the hiring entity’s control and direction, (2) the work is outside the hiring entity’s usual course of business, and (3) the worker is customarily engaged in an independently established trade, occupation, or business. Employers must prove all three elements to properly classify a worker as an independent contractor.

Employers should also closely monitor regulatory developments. As noted above, it is likely that the DOL will implement a new final rule in the near future. If and when that occurs, employers should be prepared for accompanying changes and evaluate their existing worker classifications. Given the shifting administrative environment, it is crucial that employers stay flexible in order to both maximize opportunities presented by favorable changes and, conversely, be prepared if—or when—the regulatory winds shift once more.

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About The Author

Jonathan E. Clark is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in the Firm’s Dallas office. He is an experienced, strategic, and aggressive trial lawyer who specializes in “employee departure” litigation. To that end, Jonathan frequently represents businesses seeking to enforce restrictive covenants against high-level, departing employees who gained access to their former employer’s most valuable confidential information, trade secrets, and customer relationships. Conversely, he also defends companies seeking to hire personnel who may be bound by restrictive covenants with a former employer. These scenarios often require immediate and precise legal maneuvers. Accordingly, Jonathan often spearheads emergency injunction actions in state and federal court designed to halt contractual and legal violations before the damage is done and it’s too late.

Jonathan is a contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law blog. Mr. Clark received his J.D. from Texas A&M University School of Law, Dean’s List and his B.A. from Southwestern University.

California law requires employers to provide an off-duty meal period of at least 30 minutes to an employee who works more than five hours in a day and a second meal period to an employee who works more than 10 hours. However, it also authorizes employees to waive meal periods under limited circumstances. In the April 21, 2025 decision of Bradsbery v. Vicar Operating, Inc., 110 Cal. App. 5th 899 (2025), a California Court of Appeal concluded that revocable, prospective waivers signed by employees are enforceable in the absence of evidence they were unconscionable or unduly coercive.

1. Background Of Case

In 2014, two employees sued their former employer, Vicar Operating, Inc., alleging claims on behalf of a class of employees. They alleged Vicar failed to provide them with the meal periods required by Labor Code Section 512 and Wage Orders 4 and 5. In response, Vicar asserted the employees signed a valid, written agreement that prospectively waived all waivable meal periods throughout their employment. The agreement provided the employees could revoke it at any time.

Vicar moved for summary adjudication regarding the validity of the waiver under Labor Code Section 512 and the wage orders. The trial court found the waivers valid and ruled for Vicar. The court of appeal affirmed the decision, finding that prospective written waivers of a 30-minute meal period for shifts between five and six hours accords with the text and purpose of Section 512. The legislative and administrative history confirmed the legislature and Industrial Welfare Commission determined such waivers are consistent with the welfare of employees.

2. Vicar Operated A Network Of Veterinary Hospitals

The two plaintiffs worked for Vicar, which operated a network of veterinary hospitals. In April 2009, both plaintiffs signed a written meal period waiver.

The parties stipulated that Vicar could file a motion for summary adjudication to determine whether its blanket meal period waivers to prospectively waive meal periods on qualifying shifts are enforceable under California law. Vicar asserted as an affirmative defense to liability that the employees validly waived the disputed meal periods. Oddly, the employees argued the prospective waivers were prohibited by California law. They further argued employees could waive meal periods for a given shift only after they were scheduled to work that shift. Neither argument appeared logical, let alone persuasive. The trial court granted Vicar’s motion for summary adjudication based on the plain language in the law.

The employees conceded that Section 512 and the wage orders were silent as to when the first meal period could be waived, yet argued that prospective waivers were impermissible. This argument was ill-fated. The employees argued that other features of the wage orders expressly stated that waivers could apply prospectively and, by negative implication, the failure of the meal period provisions in dispute to do the same thing implied that prospective waivers were unlawful. The court determined that the employees read too much into an assumed “implication” as meal period waivers did not expressly need to be written for shifts of five to six hours.

3. Conclusion

The court summarized its conclusion by stating: “Plaintiffs have not demonstrated Vicar’s use of prospective written waivers violates the Labor Code or the applicable wage orders at issue in this case.” On a practical level, this means that employers can enter into waivers with employees who work 5 to 6 hours to voluntarily waive their meal period. While the waiver in issue was written and revocable on its face, the court declined to opine whether a written waiver is necessary or whether it can be oral. Employers may prefer to avoid the risk of using an oral agreement to waive a meal period where employees work 6 or fewer hours and instead use written waivers that document the consent of both parties.

The topics of meal periods and meal period waivers are addressed in Section 4.2 of the Wage and Hour Manual for California Employers (27th Edition) by Attorney Richard J. Simmons of Sheppard Mullin. The book is available from Castle Publications, LLC.

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

For the past year, nearly all California employers have been required to comply with the State’s workplace violence prevention law (Labor Code Section 6401.9), which became effective on July 1, 2024. Section 6401.9 requires, among other things, that employers implement a written workplace violence prevention plan (“WVPP”), train employees on the WVPP and workplace violence hazards, maintain a violent incident log and other workplace violence-related records, and conduct periodic reviews of the WVPP. Section 6401.9 also instructed California’s Division of Occupational Safety and Health (“Cal/OSHA”) to propose a general industry workplace violence prevention standard by December 1, 2025 and gave Cal/OSHA’s Standards Board until December 31, 2026 to adopt the standard. On May 13, 2025, Cal/OSHA published an updated draft of its standard and requested additional public comments by July 14, 2025.

1. Background On Cal/OSHA’s Draft Standard

On July 15, 2024, Cal/OSHA published its initial draft standard and requested public comments on the draft by September 3, 2024. The initial draft contained numerous revisions to the language in Section 6401.9. On January 24, 2025, Cal/OSHA held an advisory meeting to consider the changes to Section 6401.9 in the initial draft. In the updated draft published by Cal/OSHA on May 13, 2025, Cal/OSHA revised much of the language added in the initial draft and made further additions, all of which appear to stem from the public comments and advisory committee meeting feedback. Cal/OSHA will hold an advisory committee meeting on the updated draft later this year.

2. Summary Of Key Proposed Revisions

The updated draft standard contains numerous key revisions to the current law, including the following:

• Exemption Clarifications: Section 6401.9 exempts a very limited number of employers and places of employment, including those that are not accessible to the public and have less than 10 employees working at any given time. However, the updated draft standard clarifies that only employers with a total headcount of “less than a total of 10 employees” are exempt. The updated draft further states that this exception does not apply to security services, janitorial services, and domestic workers at those workplaces. In other words, the standard applies to security services, janitorial services, and domestic workers who work in places of employment that are not accessible to the public and where there are less than 10 employees.

• “Threat Of Violence” Definition Clarification: The updated draft standard clarifies under the definition of a “threat of violence” that the employer is not responsible for an “employee’s texts, electronic messages, or personal social media that are not brought to the attention of the employer or that the employer could not otherwise be reasonably be aware of.” The updated draft standard also clarifies that the term “workplace violence” includes the crime of stalking (as defined in California Penal Code 646.9) which occurs at a place of employment, or in connection with a place of employment that is brought to the attention of the employer or that the employer could otherwise be reasonably be aware of.

• “Engineering Controls” Definition Clarification: The initial draft standard identified various engineering controls for employers to implement, such as electronic/mechanical access to employee-only areas, weapons detectors, enclosed workstations with shatter-resistant glass, and furniture affixed to the floor. The updated draft clarifies that the controls listed are not required. Rather, they are examples and should be implemented where applicable.

• “Work Practice Controls” Definition Clarification: The initial draft standard also identified various work practice controls for employers to adopt, such as appropriate staffing levels, dedicated security personnel, and methods and procedures to prevent unauthorized firearms and weapons in the workplace. The updated draft also clarifies that the controls listed are not required and constitute examples for employers to implement where applicable.

• “Workplace Violence Hazards” Definition Addition: The updated draft standard includes a new “workplace violence hazards” definition that lists examples of working conditions that may increase the risk of an incident, such as areas with poor illumination or blocked visibility of surrounding areas, “work locations, areas, or operations that lack effective escape routes,” “frequent or regular contact with the public,” “entries to places of employment where unauthorized access can occur.” The list also includes subjective conditions, such as “hostile work environments,” “required and excessive overtime,” and “inadequate staffing.” This added definition likely will be the subject of many public comments.

• “Authorized Employee Representative” Definition Addition: The updated draft standard includes a new “authorized employee representative” definition, which applies only to this standard and means “an organization that has a collective bargaining relationship with an employer or an organization acknowledged by a public agency as representing its employees.” Presumably, this means an employee’s counsel does not qualify as an “authorized employee representative.”

• Removal Of Language Banning Criminal Confrontations: The initial draft standard contained language prohibiting employers from requiring or encouraging employees (other than dedicated security personnel) to confront persons suspected of committing a criminal act or persons suspected of engaging in workplace violence. The updated draft removed that language entirely and replaced it with language prohibiting employers from retaliating against an employee “involved in a lawful act of self-defense or defense of others.”

• Removal Of Additional Language: The updated draft standard removed certain language that Cal/OSHA added in the initial draft, including (1) a requirement for employers to allow employees to remove themselves from any unsafe condition when necessary and without fear of reprisal, and (2) a requirement that employers must keep a record of corrective measures considered or implemented to address workplace violence hazards.

• Employee Reporting: The updated draft standard includes a provision that requires employers to ensure that employees can report “type 3” workplace violence (i.e., violence by an employee against another employee, supervisor, or manager) to someone who is not the reporting employee’s direct supervisor.

• Record Retention Clarification: The updated draft standard clarifies that all workplace violence-related records required under Section 6401.9 must be kept for five years, except for training records, which must be kept for at least one year.

3. Practical Considerations

It is likely that the updated draft standard will undergo further edits before Cal/OSHA publishes its final standard for the Standards Board to adopt. In the meantime, the current requirements under Section 6401.9 will remain in effect, and employers should ensure they continue to comply with those requirements. Notably, Section 6401.9 currently requires compliance with the following obligations on an annual basis: (1) conduct workplace violence prevention training for employees, and (2) review the effectiveness of the WVPP and revise as needed. Employers who completed an initial workplace violence prevention training in the summer of 2024, but have not done a subsequent training for current employees, should do so as soon as possible. Likewise, employers who have not reviewed their WVPP since rolling it out last summer should ensure they review it again to determine if any changes are necessary. Employers with any questions or concerns about compliance should consult with experienced employment law counsel.

For more information and guidance on developing and implementing a workplace violence prevention plan, please refer to the Employer’s Guide to Workplace Violence Prevention by Sheppard Mullin Attorneys Richard J. Simmons and Robert K. Foster. The publication is now available from Castle Publications.

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About The Author

Robert K. Foster is an Associate with Sheppard, Mullin, Richter & Hampton LLP in the firm’s San Diego (Del Mar) Office. Mr. Foster represents employers in various types of employment litigation, including class action wage and hour claims; PAGA claims; and discrimination, wrongful termination, harassment and retaliation lawsuits. In addition, he also provides strategic advice to employers on a wide range of employment issues, including wage and hour compliance, employee classification, and OSHA matters. He is a frequent contributor to the California Labor and Employment ALERT Newsletter and several other articles and is the co-author of the Employer’s Guide to Workplace Violence Prevention.

Robert litigates actions involving trade secret claims, unfair competition and enforcement of restrictive covenants and non-competes. He also handles various commercial litigation disputes, including breach of contract, breach of fiduciary duty, fraud, tortious interference with contract, unfair competition and shareholder derivative claims.

With the Trump Administration’s renewed focus on immigration, many companies are asking what to expect, and how to respond to a potential raid on their facilities by Immigration and Customs Enforcement (“ICE”). As enforcement activities continue to unfold, employers should take proactive steps to prepare for possible ICE visits or audits.

ICE is charged with the arrest, detention and removal of certain non-citizens. Most employers are already aware that ICE conducts occasional I-9 audits. But the new administration signals an increased likelihood of ICE visiting worksites to arrest non-citizens who are subject to removal from the U.S. These actions are typically based on a civil administrative warrant, although occasionally they arise from a judicial criminal warrant. Most likely though, the Enforcement & Removal Operations (“ERO”) division of ICE will focus on non-citizens with serious criminal convictions and those who were ordered removed by an Immigration Judge but have failed to depart the U.S.

Additionally, we anticipate an increase in I-9 audits in the coming years. However, due to limited agency resources and the likely economic impact, we do not expect mass raids. While some I-9 audits will be randomly selected, others will be based on a broader investigation that ICE may be conducting of that company.

Below is some guidance to prepare employers for possible ICE visits or audits.

1. ICE Priorities

The Enforcement & Removal Operations division of ICE has announced that it will target non-citizens with serious criminal convictions and those who were ordered removed by an Immigration Judge but failed to depart the U.S.

2. Civil Arrests With An Administrative Warrant From ICE

Most immigration status violations are a civil matter, not criminal. ICE has authority to issue civil administrative warrants to take custody of individuals that it has probable cause to believe are removable from the U.S. These are signed by ICE immigration officers.

3. Federal Criminal Arrests With A Warrant From A Federal Judge

Individuals are subject to criminal arrest by ICE if they have:

• Been ordered removed but never departed the U.S.;

• Re-entered the U.S. after being removed;

• Used false documents to obtain employment in the U.S.;

• Knowingly hired an individual who is not work authorized (this is reserved for a pattern/practice);

• Retained an employee after ICE informed the employer that the employee is not work authorized; or

• Any federal crime that happens to come under the jurisdiction of ICE.

4. ICE Raids

As discussed further below, we do not anticipate many mass raids by ICE. Rather, ERO will conduct targeted enforcement actions. This is because of a number of reasons.

a. Resources And Logistics: ICE has a limited number of agents, detention space, airplanes, and funds with which to conduct removal operations. In addition, almost all individuals who are arrested by ICE are entitled to a hearing before an Immigration Judge before they can be removed. Therefore, ICE has to conduct targeted operations, not mass raids.

b. Private Property: ICE may not enter private property including the private portions of commercial establishments without permission, absent the rare circumstance where there is a criminal warrant issued by a Judge.

c. Hospitals: Even though it has recently reversed a policy prohibiting this, it is very unlikely that ICE will enter a hospital to make a civil administrative arrest. ICE understands that patients are undergoing medical treatment and the agents do not want to take custody of a patient who requires medical treatment. Moreover, hospitals understandably will not release confidential data due to HIPPA requirements.

d. Schools And Churches: Unless a school or church has a pattern and practice of promoting illegal immigration and/or harboring large numbers of migrants from ICE, it is highly unlikely ICE will enter these facilities.

e. Homes: With civil administrative warrants, absent exigent circumstances, ICE must knock on the door and cannot enter without permission. However, if there is no cooperation, ICE will consider asking a Judge for a criminal arrest warrant if there are grounds to do so. In addition, if ICE encounters challenges to completing the arrest, they may be more likely to want to arrest other non-citizens in the home that lack legal status in the U.S.

5. Right To Remain Silent

Individuals, including non-citizens, may invoke their right to remain silent when questioned by ICE. Any statements they make may be used against them. That said, employers may choose to cooperate with ICE so as to avoid complications with the agency. Consult with legal counsel prior to admitting any liability.

6. ICE Request For Immigration Papers

When in public, immigration officers may ask a non-citizen for their immigration papers. The non-citizen is required to have such papers with them and to provide them to the officer. Failure to do so can lead to a $100 fine and/or up to 30 days in jail.

7. Data Analytics

To assist in their investigations, ICE has access to a host of data including state and federal arrests and convictions, employer quarterly federal payroll reports, Social Security information, U.S. passport databases, lawful permanent resident (green card) databases, Employment Authorization Document (“EAD,” or work permit) databases, I-94 databases and birth certificate information from some states.

8. I-9 Notice Of Inspection vs. I-9 Raid

Most I-9 audits involve Homeland Security Investigations (“HSI”, a different division of ICE from ERO), which drops off a Notice of Inspection and then collects the company’s I-9’s. In some states, like California, once a federal I-9 audit has commenced, the state requires that the employer post the Notice of Inspection and notify any union. An employer is liable for missing I-9’s or I-9’s that have substantive errors. However, they are not liable if an employee’s documents looked real at the time of hire but turn out to be fake. Toward the end of the audit, if ICE finds missing or false papers, it traditionally has issued a Notice of Suspect Documents advising the employer to terminate individuals on that list. However, going forward it’s possible ICE may sometimes bypass issuing the Notice of Suspect Documents and simply arrive at the worksite with civil warrants for the arrest of those employees. However, we believe this will not be the norm, due to limited agency resources.

9. Cooperation With ICE

While an employer does not have to cooperate with a civil administrative warrant, there is a risk that the agency could commence an I-9 audit if they felt an employer was obstructing their need to arrest a non-citizen employee, or in some cases obtain a criminal warrant from a Judge if they feel the conduct supports it.

10. Avoid Discrimination In Hiring

Do not ask an applicant for employment about their immigration status. You may ask if they require visa sponsorship to work for you now or in the future. After a job offer has been extended, you may give them an I-9 form to complete, in order to confirm that they are authorized to work. If you are not sure if someone is work authorized, consult with counsel. Denying employment when someone is work authorized can create substantial liability for the company.

11. Navigating The Maze

Please find a decision tree below which may be used if immigration officers visit your facility. This diagram is for general informational purposes and should not be construed as individual legal advice. Always consult legal counsel to ensure compliance and avoid liability.

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About The Authors

Greg L. Berk is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. He leads the Firm’s immigration practice and is a Certified Specialist in Immigration and Nationality Law by the State Bar of California Board of Legal Specialization>. He has over 25 years of experience advising on all aspects of U.S. immigration matters. He assists employers worldwide with the hiring and retention of foreign national executives and highly talented individuals that are needed in their U.S. workforce. He also works with investors on E-2, L-1, and EB-5 matters. He also handles I-9 and other immigration compliance matters.

Greg frequently lectures on immigration issues and is a regular contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law blog. Mr. Berk received his J.D. from Western State University College of Law, his M.B.A. from George Washington University and his B.A. from California State University.

Jonathan Meyer is a Partner in the Governmental Practice Group with the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Washington DC offices. He counsels clients on their interactions with federal and state government, as well as national and homeland security, Congressional oversight, cybersecurity, AI, high tech, and transportation security, among other issues.

Prior to returning to Sheppard Mullin, Jon was nominated by President Biden and confirmed by the Senate as the Sixth General Counsel of the U.S. Department of Homeland Security, serving from 2021 to 2024.

Jon is regularly sought out by the media – including CBS News, NPR, The Wall Street Journal, The New York Times, The Washington Post and Politico – on issues including national security, homeland security, government investigations, cybersecurity, immigration, politics and Congress.