December 2025 Newsletter

Newsletter Highlights:

An Illinois federal court declined to scale back a nationwide injunction blocking the U.S. Labor Department from enforcing a key element of one of the federal government’s DEI-related executive orders, while California enacted a new law reinforcing employers’ DEI efforts by clarifying that employees’ good-faith participation in bias-mitigation training does not constitute unlawful discrimination.
The EEOC raised the maximum civil penalty for failing to display required workplace anti-discrimination notices, increasing the amount to $698 effective September 30, 2025, and reinforcing employers’ obligations to maintain compliant physical and digital postings.
The U.S. Federal Trade Commission filed an enforcement action against a company for using broad post-employment non-competes across its workforce, signaling continued scrutiny of restrictive covenants even after the agency dropped its appeal of the now-invalidated Non-Compete Rule.
Alaska’s voter-approved Ballot Measure 1 took effect July 1, 2025, raising the state minimum wage, creating a new paid sick leave mandate, and prohibiting employers from disciplining employees who refuse to attend mandatory political or religious “captive audience” meetings.
California’s new Workplace Know Your Rights Act (SB 294) will require employers, beginning February 1, 2026, to provide a stand-alone annual rights notice to all employees and to implement new emergency contact procedures, backed by penalties of up to $10,000 per employee for ongoing violations.
Minnesota employers face a December 1, 2025 deadline under the state’s new Paid Family and Medical Leave law to provide individualized, language-appropriate notices to all employees ahead of the program’s January 1, 2026, launch, along with required workplace postings.

Diverging Trends in DEI Law: Federal Court Upholds Broad Injunction Against DEI Executive Order as California Enacts Bias-Training Protection

A federal district court in Illinois refused to scale back its April 2025 injunction prohibiting the U.S. Department of Labor from enforcing Executive Order 14173’s “Certification Provision” (Section 3(b)(iv)), which requires recipients of federal funds to certify they do not operate unlawful DEI programs and treats compliance as material under the False Claims Act. The government asked the court to limit the injunction to only apply to the specific plaintiff, Chicago Women in Trades (CWIT), in the case, but the judge explained that doing so would not eliminate the broader “chilling effect” the Certification Provision creates. In plain terms, the court found that the rule discourages all organizations from engaging in DEI-related speech for fear of triggering federal liability, and therefore broad, DOL-wide relief was necessary to prevent ongoing First Amendment harm. To that end, the Court ruled that the preliminary injunction granted in April 2025 shall continue to prevent the DOL from enforcing the “certification provision” of EO 14173 against any organization, not just CWIT. The government’s appeal remains pending in the Seventh Circuit.

In contrast to the heightened federal scrutiny surrounding DEI programs, California moved to reinforce employer-led DEI efforts through Senate Bill 303, signed October 1, 2025. The new law amends the Fair Employment and Housing Act to confirm that an employee’s acknowledgment or discussion of their own personal bias, when made in good faith during bias-mitigation training, does not, by itself, constitute unlawful discrimination. The measure is intended to reassure employers that conducting such training remains legally permissible and that candid participation by employees will not expose the organization to discrimination claims. The law takes effect January 1, 2026, signaling a continued divergence between the federal government’s enforcement priorities and state-level support for DEI initiatives.

EEOC Raises Penalties for Failure to Display Required Anti-Discrimination Notices

The U.S. Equal Employment Opportunity Commission (EEOC) issued a final rule on September 30, 2025, increasing the maximum civil monetary penalty for employers that fail to display mandatory notices about federal anti-discrimination rights and obligations. The penalty rises from $680 to $698, reflecting the EEOC’s annual inflation-based adjustment mandated by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. Because the EEOC has no discretion in calculating these adjustments, the amount is determined by changes in the Consumer Price Index and applies to penalties assessed on or after September

30. The requirement to display the “Know Your Rights: Workplace Discrimination is Illegal” poster applies broadly to private employers with 15 or more employees, state and local government employers, labor organizations, and joint labor-management committees.

Employers must post the required notice in conspicuous workplace locations where employees and applicants typically receive information, and the EEOC encourages digital posting as well, particularly for remote or fully virtual workforces. In workplaces without a physical office, a digital posting may satisfy the requirement on its own, but in traditional environments, electronic posting is recommended in addition to a physical display. The updated penalty highlights the importance of ensuring all mandated federal notices are visible, current, and accessible to all workers.

FTC Signals Continued Focus on Employer Non-Competes Through New Enforcement Action

On September 4, 2025, the U.S. Federal Trade Commission (FTC) brought an enforcement action and proposed settlement against a nationwide company alleging that its long-standing practice of requiring nearly all employees, including hourly workers, to sign 12-month post-employment non-competes violated Section 5 of the FTC Act. The action came one day before the FTC voluntarily dismissed its appeal of the court decisions preventing the agency from enforcing its prior Non-Compete Rule (See May 2024 Brief for specifics on the Rule and September 2024 Brief for story on the legal challenge to the Rule), underscoring that the agency will continue challenging what it views as overly broad non-competes through traditional antitrust tools. The complaint asserts that the employer applied non-competes across roughly 1,800 employees regardless of role or access to sensitive information, and the proposed Consent Order would prohibit most such agreements, require extensive employee notices, and impose long-term reporting and compliance obligations.

The enforcement action highlights that, despite the collapse of the nationwide non-compete ban, the FTC still intends to target non-competes it considers anticompetitive, while allowing limited exceptions for senior leaders, equity-based arrangements, and agreements tied to business sales. Many employers relying on uniform non-compete policies across diverse job categories may be re-evaluating their practices and adopting more tailored approaches aligned with legitimate business interests in light of this FTC action. The proposed settlement is open for a 30-day public comment period before potential finalization.

Alaska Implements New Wage, Leave, and Captive-Audience Protections Under Ballot Measure 1

Alaska’s Ballot Measure 1 introduced several major employment-law changes effective July 1, 2025. The state minimum wage increased to $13 per hour and will rise incrementally to $14 in 2026 and $15 in 2027. The measure also created a statewide paid sick leave requirement for employers without an existing compliant policy. Employers with 15 or more employees must now allow workers to accrue up to 56 hours of paid sick leave per year, while employers with fewer than 15 employees must provide up to 40 hours. The law applies regardless of industry and creates a uniform baseline leave standard across the state.

The measure also restricts employers from taking adverse action against employees who decline to attend mandatory meetings or communications about religious or political matters, commonly referred to as “captive audience” meetings. Employees cannot be disciplined for opting out of these discussions, although exceptions exist for legally required information, job-essential communications, and messages delivered by bona fide religious organizations to their own employees. Together, these changes significantly expand employee protections and impose new compliance obligations for Alaska employers.

California Enacts New Annual Rights Notice and Emergency Contact Requirements

Starting February 1, 2026, California employers must provide all current and new employees with a stand-alone Workplace Know Your Rights Act Notice each year, delivered through normal communication channels such as email, text, or in person. The required notice will summarize workers’ compensation benefits, protections against immigration-related abuses, rights to union activity, and constitutional protections during workplace law-enforcement interactions. It must also include enforcement agency contacts and updates on newly enacted labor laws. Employers must provide the notice in the language employees use for work communications (using translations issued by the Labor Commissioner) and maintain delivery records for three years. Retaliation for exercising rights or cooperating in investigations is prohibited.

The law (SB 294) also creates a new emergency contact obligation: by March 30, 2026, employers must provide employees with the opportunity to designate an emergency contact and must notify that contact if the employee is arrested or detained at work or, when known, while performing job duties offsite. SB 294 authorizes enforcement by the Labor Commissioner and public prosecutors, with penalties of up to $500 per employee for notice violations and up to $10,000 per employee for ongoing emergency-contact failures. Employers should begin updating onboarding practices, communication procedures, and recordkeeping systems ahead of the effective dates.

Minnesota Paid Leave Law Triggers December 1 Employer Notification Deadline

Minnesota’s new Paid Family and Medical Leave law, set to take effect January 1, 2026, will provide eligible workers with up to 20 weeks of paid leave for personal or family health needs. Before the program launches, employers must fulfill a mandatory December 1, 2025 notice requirement, which includes providing each current employee with an individualized notice in their primary language and securing acknowledgment of receipt, either electronically or in print. New hires must receive the same information within 30 days of starting work. Employers are also required to display paid leave posters in a visible location, mirroring Minnesota’s existing earned sick and safe time posting obligations.

To assist employers in meeting their notification requirements, Minnesota has provided templated posters and notices for employers to utilize, available here.

State officials have emphasized that the December 1 notice deadline is not optional and that failure to comply may result in complaints, investigations, and penalties. Minnesota enacted a statewide earned sick and safe time law in 2024, and the new paid leave program builds on that framework by further expanding worker protections.

Disclaimer: this information is not intended as legal advice. Please consult with legal counsel to ensure your organization’s compliance with applicable legal requirements.