By: Mecole Tate and Chelsea Hoffman

Seyfarth Synopsis: San Francisco just delivered a bundle of joy for new parents. The city reduced the employment tenure requirement under its Paid Parental Leave Ordinance from 180 days to 90 days, meaning eligible employees can start accessing employer-paid supplemental compensation benefits faster. Covered employers may want to start baby-proofing their policies now, ahead of phased-in compliance beginning January 1, 2027.

New parents in San Francisco have a reason to celebrate. On August 7, 2026, the mayor signed Ordinance 162-26, reducing the amount of time an employee must be on the job before qualifying for supplemental compensation benefits under the city’s Paid Parental Leave Ordinance (“SF PPLO”). Instead of waiting 180 days, employees can qualify after 90 days, bringing the ordinance in line with the city’s Paid Sick Leave Ordinance.

As a quick refresher, the SF PPLO requires employers with 20 or more employees (located anywhere) to “top up” an eligible employee’s California Paid Family Leave (“CA PFL”) benefits during new child bonding leave. In other words, the ordinance helps bridge the gap between what the State pays and an employee’s regular wages (up to a maximum cap), ensuring parents can focus less on finances and more on midnight feedings, diaper changes, and everything else that comes with welcoming a new family member. For 2026, the combined maximum weekly benefit amount from CA PFL benefits and employer-paid supplemental compensation is $2,522.

This amendment may be taking its first steps, but it is not changing much else. Employees still must work at least eight hours per week in San Francisco, perform at least 40% of their total weekly hours in the city, and otherwise qualify for CA PFL benefits for new child bonding leave. Like many toddlers, the ordinance’s rollout will happen in stages rather than all at once. Employers with 100 or more employees must comply with the new 90-day eligibility threshold beginning January 1, 2027. Employers with 20 to 99 employees get a little more time to crawl before they walk, with compliance delayed until January 1, 2028. Employers with fewer than 20 employees remain exempt.

Covered employers should not sleep on this update, even if new parents might not be getting much sleep themselves. Now is the time to revisit paid parental leave policies, update eligibility procedures, and monitor the SF PPLO webpage for updated guidance, posters, and forms. With the shortened waiting period, more employees will be eligible for benefits sooner. Employers should make sure their policies are ready before this amendment leaves the crib and starts walking.

Also, please consider this your friendly reminder that handbook season is just around the corner. Whether your handbook needs a quick checkup or a full nursery-to-college makeover, Seyfarth’s Handbook Team is ready to help. Additionally, be on the lookout for details about Seyfarth’s Employee Handbook Update Webinar, where we’ll cover the latest developments. After all, when it comes to workplace policies, it’s always better to baby-proof now than scramble later!

Episode 05: Utilizing Coaching to Prevent Workplace Flashpoints Conflict

Hosted by Dawn Solowey with special guest Chelsea Hoffman

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In this episode of the Cultural Flashpoints Vidcast, Dawn Solowey sits down with Chelsea Hoffman to explore how one-on-one coaching can serve as an effective tool for addressing workplace cultural flashpoints, including polarizing political, social, and global issues that create tension among employees. The discussion examines situations where coaching may be a better alternative to formal discipline, helping employers address problematic conduct, reinforce workplace expectations, and assess whether an employee is open to learning and growth.

Chelsea also shares practical insights on building trust with employees, tailoring coaching to individual circumstances, evaluating outcomes, and delivering meaningful feedback to employers. Together, Dawn and Chelsea explain why coaching can help organizations de-escalate workplace conflicts, strengthen professional conduct, and create opportunities for course correction before issues become larger workplace liabilities.

By: Yana Komsitsky, Paul Whinder, and Georgia Hill Smith

Artificial intelligence enabled tools are rapidly taking over recruiting, hiring, workforce planning, performance management, and employee monitoring tools. In a recent Westlaw Today article, Yana Komsitsky, Paul Whinder, and Georgia Hill Smith discuss which types of workplace applications are likely to be classified as high-risk under the EU AI Act and what employers should be doing now to prepare. Their practical roadmap addresses governance, vendor oversight, workforce impacts, and global compliance strategies for organizations navigating an increasingly complex AI/automated decision-making regulatory environment.

Why This Matters

  • Some AI tools that influence employment-related decisions may face more heightened regulatory scrutiny than others, but the assessment may vary under different frameworks.
  • Employers should plan to distinguish compliance for administrative tools and technologies that rank, score, recommend, or otherwise influence workplace decisions.
  • HR, legal, compliance, and technology teams should work together to evaluate and govern workplace AI initiatives.

The full article is available here.

By: Alison Silveira, Lilah Wylde, and Natalie Costero

The House settlement was expected to bring long-awaited structure to college athletics. Instead, it has marked the beginning of a new phase of litigation, regulatory disputes, and legislative activity  that will shape how Universities implement revenue sharing, manage NIL programs, and interact with third-party partners.

For Universities now one year into the effectiveness of House, the challenge is no longer simply preparing for House: it is preparing for what comes next. New lawsuits are testing the limits of the settlement, Congress continues to debate federal legislation, and unresolved employment-law questions remain. 

The Latest House Settlement Disputes

Two recent developments around enforcement of House should be on every university’s radar.

First, in May 2026, the College Sports Commission (“CSC”), charged with overseeing University and athlete compliance with House, rejected more than $7.5 million in NIL agreements between the University of Nebraska’s student-athletes and the University’s exclusive multimedia rights (“MMR”) partner. Following the arbitrator’s ruling the athlete’s counsel asked the court to clarify whether MMRs and third-party sponsors fall within the settlement’s definition of “Associated Entities or Individuals.” They argued that MMRs and commercial sponsors function as independent business partners rather than school-affiliated entities and therefore should not be subject to CSC oversight.

Last week, the Magistrate Judge denied Plaintiff’s motion. The Court concluded that MMRs and third-party sponsors are not categorially excluded from the definition of “Associated Entities or Individuals.” Instead, whether an entity is subject to CSC oversight depends on the nature of its relationship with the university and whether it functions in a manner consistent with the settlement’s purpose of preventing school-affiliated entities from using NIL agreements to influence recruiting or roster retention.

Why this matters: Universities that work with MMRs, sponsors, or other third-party partners should not assume those relationships fall outside the CSC’s jurisdiction. Instead, institutions should evaluate how these relationships are structured and remain prepared for increased scrutiny of arrangements that could be viewed as advancing a university’s recruiting or roster-retention efforts.

Second, a new class action—Ili et al. v. National Collegiate Athletic Association et al.—was filed in June 2026 in the U.S. District Court for the Northern District of California.

The lawsuit, brought by USC linebacker Talanoa Ili and Stanford quarterback Charlie Mirer, alleges that the NCAA, the Power Four conferences, together with the CSC, unlawfully implemented nationwide NIL restrictions in California and sixteen other states whose laws prohibit athletic associations from restricting student-athletes’ ability to earn NIL compensation.

Importantly, the plaintiffs do not challenge the House settlement itself. Instead, they argue the defendants exceeded the settlement’s authority by implementing its NIL framework in a manner that conflicts with state law. According to the complaint, the NCAA and the Power Four conferences agreed to impose nationwide restrictions on both direct revenue-sharing payments and certain third-party NIL compensation, despite knowing that those restrictions conflicted with state NIL laws. Plaintiffs content that this coordinated implementation constitutes an unlawful agreement to suppress athlete compensation—amounting to price-fixing and a group boycott in violation of the Sherman Act—as well as violations of California law.

Why this matters: While this litigation is in its early stages, it is one universities should closely monitor, particularly if they operate in states with expansive NIL statutes. If plaintiffs prevail, universities may need to revisit NIL compliance protocols, athlete agreements, and internal policies to account for state law limitations on the NCAA and CSC’s enforcement authority.

Congress Continues Its Search For a National Solution

Following Trump’s Executive Order, discussed in our recent blog, Congress has continued considering whether federal legislation can provide the uniformity that the House settlement has not yet achieved. After earlier proposals stalled, a bipartisan group of senators introduced the Protect College Sports Act of 2026, which would create national standards governing NIL compensation, revenue sharing, athlete protections, eligibility, transfers, and media rights.

For universities, the bill’s most significant feature may be its effort to replace the current landscape of varying state NIL laws with a single federal framework. The legislation would largely preserve the House settlement’s revenue-sharing and third-party NIL structure, provide limited antitrust protection for rules governing athlete compensation and eligibility, and require athletes to report NIL agreements exceeding $600. Institutions would also face new obligations involving NIL data reporting, agent oversight, scholarships, medical coverage, academic protections, and athlete health and safety.  As such,  many universities and conferences are publicly opposing the Act. The SEC and Big Ten released a joint statement against the Act, stating they have not had the opportunity to voice their concerns about the impact of the Act.

Operationally, the bill would require coordination well beyond the athletics compliance office. Universities may need to revise athlete agreements and NIL policies, develop new reporting and data-management systems, review agent-certification procedures, budget for expanded medical and scholarship protections, and assign responsibility for whistleblower complaints and potential private litigation. Institutions participating in any collective media-rights arrangement could also face new requirements concerning revenue distribution and the preservation of women’s and Olympic sports.   

The bill is currently being prepped for floor consideration by Senate leadership, and public reports suggest that lawmakers are aiming to hold a vote before the Senate’s month-long August recess.

Why this matters: Because the bill remains subject to amendment and senate voting, schools should focus on building flexible compliance systems that can accommodate federal requirements without losing sight of continuing state-law and employment-law obligations. However, universities should not wait for final legislation before assessing their readiness for a federal framework. Institutions should identify which NIL, revenue-sharing, medical, scholarship, and reporting practices would require revision; determine which offices would own those responsibilities; and evaluate the financial and administrative resources necessary to implement them.

The Looming Issue of Employment Status

While litigation progresses and legislation is proposed, one major question remains: whether student-athletes may be classified as employees. Notably, the Protect College Sports Act does not address the issue. Unlike prior legislative proposals that would have expressly prohibited employee status, the current bill remains neutral, leaving courts, administrative agencies, and lawmakers to continue shaping the issue.

The uncertainty carries practical implications beyond athlete compensation. As universities implement revenue-sharing programs and continue facilitating NIL opportunities, institutions should keep in mind whether their compensation structures, the level of institutional involvement in athlete activities, the degree of control exercised over student-athletes could be cited in future employment-related litigation.

While revenue sharing and NIL agreements largely provide language explicitly stating student athletes are not employees, these agreements and payments alone do not determine employee status. These agreements could become part of a factual record courts evaluate when considering wage and hour, collective bargaining, workers’ compensation, and other employment-law claims.

Why it matters: Compliance with House may not resolve employment-law concerns. Universities should continue evaluating compensation models with employment counsel, documenting business rationale for compensation decisions, and reviewing existing policies to minimize wage-and-hour exposure. .

Action Items for Universities

While the legal framework governing college athletics will likely continue evolving through litigation, regulatory guidance, and potential federal legislation, universities need not wait for final answers before taking proactive steps to reduce risk. Universities can and should:

  1. Evaluate institutional governance: ensure clear process for making decisions regarding athlete compensation and identify which departments are responsible for reviewing, approving, and implementing compensation-related decisions.
  2. Review relationships with third–party partners: Assess agreements and operating practices with MMRs, corporate sponsors, and collectives to assess whether existing agreements remain appropriate as CSC guidance and litigation continue to evolve.
  3. Assess compliance infrastructure: Assess whether current policies, reporting procedures, and internal controls are sufficiently flexible to adapt to future regulatory changes and whether the school will be able to afford possible implications.
  4. Incorporate employment–law considerations into compensation planning: involve employment counsel when developing new compensation models and periodically assess whether evolving practices create additional wage-and-hour, employee-classification, or labor-law considerations.

By: Meg A. Burnham

Most people do not think of themselves as employers. But if you hire a nanny, caregiver, housekeeper, gardener, cook, or other worker in your home, Washington’s new Domestic Workers Bill of Rights may change that. Beginning July 1, 2027, families and businesses that rely on in-home help will face employer obligations that look far more like a traditional workplace than a private household.

For many Washington families, this will be a significant adjustment.

Historically, many household employment relationships operated informally. A family would agree on pay, discuss a schedule, and move forward. Under the new law, that approach may create substantial risk. The legislation generally requires written agreements, establishes wage and overtime protections, creates termination notice requirements, restricts certain monitoring practices inside the home, and expands protections against discrimination and retaliation.

The biggest takeaway is simple: If you pay someone to work in your home, Washington increasingly expects you to act like an employer.

Families that previously relied on informal arrangements may now need written employment agreements describing compensation, schedules, duties, and other terms of employment.

Households will also need to pay closer attention to timekeeping and payroll practices. Domestic workers are generally entitled to minimum wage protections, overtime, and paid sick leave, which means families may need to track hours worked and maintain payroll records in ways they never have before.

Termination practices will change as well. Many families assume they can simply end the relationship when circumstances change. Under the new law, advance written notice or severance pay may be required.

The law also reaches into areas many households may never have considered employment issues. Families with cameras or monitoring systems inside the home should review those practices carefully because the legislation contains new privacy protections for domestic workers.

In short, families who hire help at home may need to start thinking about written contracts, payroll compliance, recordkeeping, privacy rules, and termination procedures the same way a traditional employer would.

The practical reality is that Washington has decided that the home can also be a workplace. And when the home becomes a workplace, employment laws follow.

By: Scott Prange

Seyfarth Synopsis: Washington’s health care employers have spent years navigating tighter and tighter restrictions on noncompetes—but under HB 1155, the state has decided to largely eliminate them altogether. Beginning June 30, 2027, physician and provider noncompetes will be largely void, and the law may extend far beyond traditional restrictive covenants to scrutinize compensation terms that penalize employee mobility. The real challenge for health care organizations is no longer how to enforce a noncompete—it’s how to retain physicians, protect competitive interests, and manage patient transitions in a world where provider mobility is the rule, not the exception.

Washington health care employers have spent years living in an increasingly restrictive noncompete environment. First came salary thresholds. Then disclosure requirements. Then additional restrictions on nonsolicitation agreements. Then the courts got involved.

Apparently, after years of tinkering with noncompete regulations, the legislature concluded the experiment had failed—not because the restrictions were insufficient, but because employers continued to have noncompetes at all.

Beginning June 30, 2027, Washington’s new noncompete law will effectively eliminate nearly all employment-related noncompetition agreements, including for physicians, and advanced practice providers.

Olympia’s message could not be much clearer: employers should retain physicians by giving them reasons to stay, not by making it harder to leave.

And while 2027 may sound comfortably far away, health care organizations should start preparing now. Because when the law takes effect, physician noncompetes won’t merely become harder to enforce. They’ll become illegal.

The Noncompete Era Is Ending

For years, Washington treated noncompetes like an aging treatment protocol—still technically available, but subject to so many warnings, limitations, and second thoughts that its long-term prognosis was never particularly encouraging.

HB 1155 takes a different approach.

Instead of asking whether a noncompete is reasonable, adequately disclosed, properly limited in scope, tied to sufficient compensation, and supported by a legitimate business interest, the legislature decided to skip the analysis entirely.

The legislature’s new approach can be summarized in a single, legally sophisticated word: No.

Existing noncompetes? Void.

Future noncompetes? Void.

Threatening to enforce one? Problematic.

Telling a physician or a provider they are still bound by one? Also problematic.

Beginning June 30, 2027:

  • Existing and future noncompetition covenants will be void.
  • Employers may not enforce or attempt to enforce noncompetes.
  • Employers may not threaten to enforce noncompetes.
  • Employers may not represent that a worker remains bound by a noncompete.
  • Violations may trigger statutory penalties, attorney fees, and enforcement actions by both private parties and the Washington Attorney General.

The law doesn’t merely regulate restrictive covenants. It largely prohibits their use all together.

Why Health care Have the Most to Lose

Let’s be honest: health care employers did not maintain physician and provider noncompetes because they enjoyed paying lawyers to litigate them or relished the occasional courtroom battle. They maintained them because the prospect of enforcement often kept physicians from testing the market in the first place and helped protect the substantial investments employers make in recruiting, onboarding, and integrating providers into their organizations.

Recruiting providers is expensive. Very expensive. By the time a physician or a provider is recruited, licensed, credentialed, onboarded, marketed to the community, integrated into referral networks, and finally seeing patients at full volume, the organization has often made a substantial investment.

Yet the concern was never just about recovering recruiting costs. A departing physician or physician can affect far more than a balance sheet. Health care employers have long worried about disruptions to continuity of care, erosion of referral relationships, coverage and call-schedule gaps, competition for scarce specialties, and the loss of patient relationships that take years to develop.

Historically, a restrictive covenant helped protect at least all if not some of those interests.

Beginning in 2027, the response to “We’re concerned that Dr. Bailey may join the practice across the street” can no longer be, “Let’s look at the noncompete.”

The better question becomes:

“Why would Dr. Bailey stay in the first place?”

That may sound like the sort of thing someone posts on LinkedIn immediately before announcing a leadership retreat. But health care employers that continue relying on contractual restrictions as their primary retention strategy may find themselves operating with a playbook that no longer exists.

The Most Consequential Part of the Law May Not Be the Noncompete Ban

If all HB 1155 did was eliminate geographic noncompetes, health care employers would have a fairly straightforward drafting exercise ahead of them.

Unfortunately, the statute appears to have bigger ambitions.

One of the more interesting features of the new law is that it may reach provisions that aren’t labeled “noncompetes” at all. The statute’s definition of a noncompetition covenant includes provisions requiring a worker to repay, return, or forfeit compensation as a consequence of engaging in lawful competitive employment (whatever that means).

This may place portions of physician and provider compensation arrangements under increased scrutiny. Health care employers should pay particular attention to compensation structures that were historically designed to protect recruiting and onboarding investments but may act as a constraint on mobility.

Certain repayment obligations, forfeiture provisions, retention incentives, equity arrangements, and compensation structures may face scrutiny if they effectively penalize a provider for leaving and joining a competitor.

In other words, calling something a “retention incentive” does not necessarily make it a retention incentive. Much like calling a donut a wellness program does not make it healthy.

Health care employers should take a close look at:

  • Sign-on bonuses.
  • Retention bonuses.
  • Forgivable loans.
  • Equity programs.
  • Deferred compensation arrangements.
  • Clawback provisions.
  • Physician recruiting packages.

Because the question regulators and courts may ask is not, “What did you call this provision?” The question may be, “What does it actually do?” As every health care compliance officer knows, regulators tend to be stubbornly interested in substance over labels.

The Biggest Wild Card? Patients Have a Vote.

Many physician and provider agreements historically assumed that when a physician leaves, the patients stay.

Patients do not always cooperate. Patients have a habit of making their own decisions.

The new law continues to permit carefully drafted patient nonsolicitation provisions. But health care employers should pay close attention to the distinction between soliciting patients and treating patients. Many physician agreements go beyond prohibiting active solicitation and instead prohibit treatment of former patients altogether.

Those are not necessarily the same thing.

The new law expressly distinguishes between soliciting a patient and accepting business from a patient. Restrictions that directly or indirectly prevent a provider from accepting or treating a patient who independently seeks out the provider may be vulnerable if they function as restraints on competition rather than true nonsolicitation provisions.

A restriction that prevents Dr. Bailey from actively raiding a patient panel may survive.

A restriction that effectively prevents patients from continuing to see Dr. Bailey after they independently decide to follow her may face a much tougher road.

The law’s underlying theme is that employee mobility matters. But so does patient choice.

In a World Without Noncompete, Confidentiality Agreements May Become the Strongest Medicine Available.

If noncompetes were your first line of defense, confidentiality agreements and trade secret protections are about to get promoted from the waiting room to the operating room. Provider mobility is the new reality. Information mobility does not have to be

Patient-facing businesses often possess valuable proprietary information, including referral data, strategic planning materials, payer contracting information, compensation models, operational metrics, and business development strategies. In a post-noncompete world, that information may become one of the organization’s most important vital signs.

The practical question is not whether confidential information exists. It almost certainly does. The real question is whether the organization has taken the steps necessary to diagnose, document, and protect it as confidential information. Think less about who walks out the door and more about what walks out with them

Employers should evaluate whether they have:

  • Updated confidentiality agreements.
  • Appropriate trade secret protections.
  • Role-based access controls.
  • Electronic monitoring and auditing capabilities.
  • Secure offboarding procedures.
  • Effective documentation of proprietary business information.

In other words, health care employers may need to spend less time writing restrictive covenants and more time strengthening their information hygiene. After all, courts are far more likely to prescribe relief when an employer can clearly identify and protect a trade secret than when it simply complains that valuable employees changed practices.

Confidentiality agreements and trade secret protections remain fully enforceable under the amended statute and will likely become among the most important tools available to health care employers after 2027. As noncompetes are discharged from active duty, trade secret protections may find themselves serving as the new chief resident of the employer-protection ward.

Seven Things to Do Before June 2027

The clock is ticking. The period before June 30, 2027 is for thorough preparation, not procrastination.

1. Identify Every Restrictive Covenant—Especially the Ones Hiding in Plain Sight

    Review:

    • Physician employment agreements.
    • APP agreements.
    • Medical director agreements.
    • Independent contractor agreements.
    • Equity and incentive plans.
    • Practice acquisition agreements.
    • Compensation and retention programs.

    Do not limit the review to provisions expressly labeled “noncompete.”

    2. Create a Notice Compliance Plan

    The law requires employers to make reasonable efforts to notify current and former workers whose covered restrictions remain in effect that those provisions are void and unenforceable by October 1, 2027.

    Health care employers should begin identifying affected physicians, providers, and contractors now rather than attempting to reconstruct records later.

    3. Reevaluate Compensation Programs

    Assess whether compensation provisions could be characterized as:

    • Forfeiture-for-competition provisions.
    • Stay-or-pay arrangements.
    • Repayment obligations triggered by competitive employment.
    • Competitive-employment clawbacks.

    Particular attention should be paid to physician incentive compensation, equity arrangements, retention bonuses, and recruiting incentives.

    4. Redesign Provider Retention Strategies

    Health care employers that previously relied on restrictive covenants should focus on retention rather than restriction. Because “people stay here because they have to” is not a long-term workforce strategy.

    Instead, try:

    • Leadership opportunities.
    • Partnership pathways.
    • Professional development.
    • Competitive compensation.
    • Scheduling flexibility.
    • Physician engagement initiatives.

    5. Strengthen Existing Alternatives

    As existing physician and provider agreements come up for renewal, health care employers have a natural opportunity to reassess their post-noncompete strategy. Rather than simply recycling legacy restrictive covenants, employers should evaluate whether their agreements appropriately emphasize the protections that remain fully enforceable and are likely to become increasingly important after 2027.

    Ensure agreements contain enforceable:

    • Confidentiality protections.
    • Trade secret protections.
    • Employee nonsolicitation provisions.
    • Patient nonsolicitation provisions tailored to the statute’s narrower requirements.

    6. Develop Patient Transition Protocols

    Organizations that proactively manage provider departures will be better positioned than those attempting to address patient transition issues after a physician has already left.

    Establish lawful procedures governing:

    • Patient communications.
    • Medical record transfers.
    • Continuity-of-care planning.
    • Departing provider announcements.
    • Referral management.

    7. Multi-State Health care Systems Beware

    Health care organizations operating across multiple states should not assume they can solve this problem through a different governing-law clause. Washington continues to take an exceptionally aggressive approach to protecting Washington-based workers from out-of-state noncompete enforcement.

    The Real Takeaway

    The biggest mistake health care employers can make is viewing HB 1155 as simply a noncompete problem.

    It’s a retention problem.

    It’s a recruiting problem.

    It’s a compensation-design problem.

    It’s a patient-transition problem.

    And, for many organizations, it’s a culture problem.

    It will take the village to address.

    For years, restrictive covenants functioned as a safety net. Beginning in 2027, that safety net largely disappears.

    Health care organizations that thrive won’t be the ones finding clever new ways to recreate noncompetes under a different name.

    They’ll be the organizations that become places physicians and providers actually want to stay.

    Which, admittedly, is much harder than drafting a restrictive covenant.

    It is also considerably more enforceable.

    And unlike a noncompete, it doesn’t become void on June 30, 2027.

    The legislature already took care of that for you.

    By: Linda C. Schoonmaker, Elizabeth L. Humphrey, Julia M. Tape, and Nikki Nobile*

    On April 10, 2026, the Texas Supreme Court issued a closely watched decision in Texas Department of Public Safety v. Callaway, No. 24-0966, addressing when a disability is—and is not—protected under Chapter 21 of the Texas Labor Code. The Court held that an employer may lawfully terminate an employee whose physical or mental condition impairs the employee’s ability to reasonably perform the job, even when that condition qualifies as a disability. The decision provides employers with important guidance, particularly for safety-sensitive roles, while also underscoring the care required when evaluating performance issues tied to mental health conditions.

    Background: The Incident and the Lawsuit

    Robert Christopher Callaway was a longtime Texas Department of Public Safety (“DPS”) officer and Texas Ranger who suffered from post-traumatic stress disorder (“PTSD”). He took medical leave in 2017 to seek treatment for alcoholism and PTSD, and transferred to the Criminal Investigations Division upon his return in 2018. Callaway took additional leave in 2019 to receive inpatient treatment for the same conditions.

    On January 15, 2020, while on leave, Callaway became involved in a volatile off-duty incident at his daughter’s high school after he was notified that his daughter might be detained during a mental health crisis. Callaway arrived with his DPS badge, handcuffs, and his personal firearm (because he was off-duty). Inside a small office, witnesses reported that Callaway loudly confronted counselors, displayed his badge, and threatened to “prove who has got a bigger set of handcuffs” by putting responding officers “in jail for interfering with [his] rights as a parent.” A counselor reported feeling trapped and fearing for her safety and life.

    Although criminal charges were ultimately not pursued, DPS conducted an internal investigation and concluded that Callaway’s PTSD impaired his ability to reasonably perform the duties of a DPS officer, particularly given the risks inherent in law enforcement work. As a result, DPS terminated his employment.

    Callaway sued DPS under Chapter 21, alleging disability discrimination and retaliation. The trial court denied DPS’s motions for summary judgment and plea to the jurisdiction, and the court of appeals allowed the disability discrimination claim to proceed. DPS sought and obtained review from the Texas Supreme Court.

    The Court’s Holding: Disability Protection Ends When Job Performance Fails

    The Texas Supreme Court reversed the appellate court’s decision permitting the disability claim to move forward. Relying on Texas Labor Code § 21.105, the Court emphasized that Chapter 21 prohibits discrimination only with respect to physical or mental conditions that do not impair an individual’s ability to reasonably perform a job.

    Relying on the statute’s plain language, the Court applied an objective standard grounded in the term “reasonable.” Specifically, the Court held that the record conclusively demonstrated Callaway’s PTSD impaired his ability to perform the essential functions of a DPS officer. In evaluating the evidence, the Court focused on the loss of emotional control, misuse of law enforcement authority, and the “grave risk” posed to others—especially fellow officers—if such conduct were to occur in the line of duty. Consistent with the Court’s textual approach, it rejected Callaway’s reliance on federal statutes and judicial opinions, concluding that they “shed no light on the meaning of the statutory text our legislature enacted.”

    Because Callaway’s condition impaired his job performance, the Court concluded that Chapter 21’s disability discrimination protections did not apply and dismissed the claim against DPS.

    A Tight Line: Employer Judgment vs. Disability Discrimination

    The decision walks a careful (and potentially controversial) line. On the one hand, it affirms that employers are not required to retain employees who cannot safely or effectively perform their jobs, particularly in safety-sensitive positions. On the other hand, it places significant weight on an employer’s assessment of when a disability has crossed from a protected condition into a job-disqualifying impairment. As a result, employers should take an individualized approach to ensure all factors have been considered before taking adverse employment action. Importantly, Callaway does not authorize employers to terminate employees simply because they have a disability, or because a disability might hypothetically affect performance. Rather, the Court’s analysis turned on specific, documented conduct demonstrating that the disability actually impaired the employee’s ability to perform the job at issue.

    How Callaway Fits with Existing Disability Law

    While Callaway arises under Texas law, its reasoning parallels key principles in federal disability jurisprudence:

    • Under the ADA, employers may require employees to perform the essential functions of their jobs, with or without reasonable accommodation.
    • Courts have long recognized that individuals who pose a direct threat or cannot safely perform safety-sensitive roles may fall outside statutory protections. See, e.g., Chevron U.S.A. Inc. v. Echazabal, 536 U.S. 73 (2002).
    • At the same time, federal law cautions against decisions based on stereotypes, assumptions, or generalized fears about mental health conditions—an undercurrent employers should not overlook in applying Callaway.

    What Callaway adds is a clear statement from Texas’s highest court that, under Chapter 21, impairment of reasonable job performance is a threshold issue—not merely part of a burden shifting analysis.

    Key Takeaways for Employers

    1. Focus on Performance, Not Diagnosis

    Employers should ground decisions in observable conduct and job-related performance, not the mere existence of a medical condition.

    2. Document the Nexus Between Condition and Job Duties

    The Court relied heavily on evidence showing how Callaway’s condition manifested in ways incompatible with his role. Documentation matters.

    3. Take a Collaborative Approach

    Employers should confer with a variety of resources and personnel when developing a plan of action as to whether reasonable accommodations can be provided.

    4. Exercise Extra Care in Safety-Sensitive Positions

    Courts are more likely to credit employer judgments where public safety, use of force, or high-stress decision-making is central to the job.

    5. Do Not Skip the Accommodation Analysis

    Although DPS ultimately prevailed, employers should still engage in the interactive process where appropriate and consider whether accommodations or alternative roles are viable before concluding an impairment is disqualifying.

    6. Train Decision Makers on Objective Standards

    Managers should understand that Callaway does not give carte blanche to terminate employees with disabilities—it reinforces the need for objective, job-specific analysis.

    Bottom Line

    Texas Department of Public Safety v. Callaway provides employers with meaningful clarity under Chapter 21, but it also underscores the importance of disciplined decision-making when disability and job performance intersect. Employers who rely on evidence, avoid assumptions, and carefully document their reasoning will be best positioned to navigate this evolving area of the law.

    *Nikki Nobile is a law clerk in the Labor and Employment Department. Many thanks for her contribution to this legal update. 

    By: Samantha L. Brooks, Christopher J. DeGroff, and Andrew L. Scroggins

    Seyfarth Synopsis: In a critical development, the EEOC has officially replaced its Strategic Enforcement Plan (SEP) for Fiscal Years 2024–2028 with a new National Enforcement Plan (NEP) for Fiscal Years 2025–2029, signed by Chair Andrea R. Lucas on June 4, 2026.  The transition represents a fundamental shift of the agency’s enforcement philosophy, priority structure, and relationship to the Trump administration. Here is our detailed breakdown of what changed, what survived, what was scrapped, and importantly, what employers need to know and consider now.

    I. The Big Picture: A Philosophical Overhaul

    The EEOC’s Strategic Enforcement Plan has, for years, served as the agency’s compass.  Commission resources, administrative investigations, and EEOC lawsuits were all measured against the SEP.  The SEP was rooted in a social justice framework, and committed the agency to supporting “lawful and appropriate diversity, equity, inclusion, and accessibility (DEIA) practices.”

    The NEP — supported by EEOC Chair Andrea Lucas and fellow Republican Commissioner Brittany Panuccio[1] — adopts a starkly different posture. It opens by “reaffirm[ing] that [the EEOC] is an executive branch agency” and declares that “the Commission will use its discretion in its deployment of its enforcement authority to advance the Administration’s policy objectives and comply with relevant Executive Orders.”  In place of the racial and economic justice framing, the NEP has a clear law-enforcement-first orientation, with explicit alignment to White House policy directives, including Executive Order 14281, Restoring Equality of Opportunity and Meritocracy.

    What this means for employers: While the SEP positioned the EEOC as an independent civil rights champion, the NEP positions it as an executive branch law enforcement agency taking its marching orders from the Administration.

    II. Structural Changes: Washington Takes the Wheel and Ends Local EEOC Enforcement Priorities

    Under the SEP, the agency operated through a combination of national priorities and District Complement Plans — locally tailored enforcement strategies that allowed individual District offices to identify region-specific vulnerable populations and enforcement targets, while still adapting the agency’s SEP.

    The NEP abruptly withdrew all District Complement Plans and other local enforcement plans or priorities.  In their place, the NEP emphasizes that the EEOC must “function as a national law enforcement agency,” with the Chair directing “collaboration, coordination, and communication” across all offices.  The NEP contemplates nationwide staffing deployments, including reassigning matters across Districts and deploying headquarters personnel to field operations depending on the nature of a particular matter.

    What this means for employers: Multi-state employers should expect more uniform enforcement. The patchwork of District-level priorities that sometimes allowed employers to predict regional enforcement trends is gone. The agency now plans to operate from a single national playbook. This will likely take time, but we expect to observe increased consistency in the coming months.

    III. Disparate Impact: A Doctrinal Sea Change

    One of the NEP’s most consequential provisions is its outright abandonment of disparate impact theory. The now-defunct SEP (and years of prior enforcement announcements) specifically incorporated the disparate impact framework to pursue facially neutral policies with unequal outcomes.  Indeed, the SEP priorities around barriers in recruitment and hiring, AI in decision-making, and background checks all implicated disparate impact analysis.

    Through the NEP, the Commission states that “allegations of intentional discrimination (disparate treatment) by an employer inherently are more egregious forms of discrimination than unintentional disparities between groups of employees which arise from an employer’s neutral policies or practices (disparate impact).”

    Citing Executive Order 14281, the NEP commits the EEOC to:

    • Prioritize disparate treatment theories of liability;
    • Eliminate the use of disparate impact liability theories in investigations “to the maximum degree possible”; and
    • Not commence, develop, or continue to pursue litigation advancing disparate impact claims.

    What this means for employers: Disparate impact remains a valid statutory theory codified in the Civil Rights Act of 1991, as the NEP itself acknowledges. But the EEOC will no longer be the vehicle through which these claims are advanced at the federal level. Private plaintiffs, state attorneys general, and state civil rights agencies remain free to pursue disparate impact theories, and employers should be on the lookout for such claims.

    IV. DEI Squarely in the Crosshairs

    The NEP’s specificity on DEI deserves special mention. The EEOC has identified the following practices as potential enforcement targets:

    • Race- or sex-based quotas, including “aspirational goals” that function as proxies for quotas or that incentivize race- and sex-based decision-making in hiring, staffing, layoffs, and promotions;
    • Diverse slate policies and diverse hiring panel policies;
    • Diversity statements required of candidates;
    • Sharing employee race or sex data with managers, the public, or non-HR personnel;
    • Rubrics or evaluation methods that consider protected characteristics;
    • Executive compensation or bonuses tied to demographic goals or diversity metrics; and
    • Limiting access to training, internships, fellowships, mentorship, sponsorship, apprenticeships, employer-sponsored groups or events, bonuses, or other terms and conditions of employment on the basis of protected characteristics.

    What this means for employers: This is the most detailed roadmap the EEOC has published for DEI-related enforcement. The specificity strongly suggests the agency already has enforcement targets in mind.  In fact, the NEP specifically references DEI programs and practices “often adopted by large corporations, prominent universities, and other elite institutions.”

    V. Substantive Changes: A Priority-by-Priority Comparison

    Below, we walk through each of the NEP’s six subject-matter priorities and compare them against the SEP’s framework.

    Priority 1: Repeated, Overt, and Intentional Discrimination

    The first NEP priority is cases involving repeated or overt discrimination or intentional discrimination.  The EEOC provides numerous examples of this, including:

    • Job advertisements excluding or encouraging certain individuals to apply, including targeting applicants based on race (including encouraging “diverse candidates” to apply) or national origin (including encouraging “guest worker visa holders” or “PERM applicants” to apply, and practices or preferences for guest worker visa holders or PERM applicants[2]), or other practices or policies labeled or framed as diversity, equity, and inclusion (including quotas or aspirational goals, limiting access to any term, condition, or privilege of employment based on protected characteristic, or otherwise using race and sex in any decision, including diverse slate policies, diverse hiring panel policies, and any other candidate evaluation practices and compensation practices tied to a protected characteristic or diversity goals);
    • Staffing agencies that exclude individuals from employment based on protected characteristics;
    • Mass denials of accommodations; and
    • Systematic harassment.

    Of note, while systemic harassment appears alongside other examples of overt discrimination in the NEP, its prominence is dramatically reduced as compared with the previous SEP.  The now-scrapped SEP devoted an entire standalone priority to systemic harassment, backed by detailed statistical data showing over 34% of charges between FY 2018–2022 included a harassment allegation.  By contrast, the NEP’s only direct mention of systemic discrimination is a single line item in an enumerated list.

    Key takeaway: The SEP’s hiring-barrier priority was largely aimed at systemic practices that disproportionately screened out minorities and women. The NEP has flipped this lens: its hiring-related enforcement is focused on protecting American workers from being disadvantaged in favor of visa holders. Chair Lucas has designated “Protecting American workers from anti-American national origin discrimination” as one of four Chair Priorities discussed below.

    Priority 2: Legal Doctrine, Recent Supreme Court Precedent, and Statutory Interpretation

    The second priority emphasizes cases with the potential to promote the development of law interpreting the anti-discrimination statutes the EEOC enforces.  The NEP highlights in particular “the application or scope of recent Supreme Court precedent or presenting unresolved issues of statutory interpretation,” highlighting some specific cases. These include Title VII claims under Ames v. Ohio Department of Youth Services (holding the same standard applies when majority group members allege discrimination); Muldrow v. St. Louis (holding that “some harm” is enough to show an applicant or employee suffered an adverse action); Students for Fair Admissions (holding that protected characteristics cannot be a consideration in admission decisions, which some argue extends to employment decisions as well); Groff v. DeJoy (holding that employers are obligated to provide reasonable accommodations for sincerely held religious beliefs of employees); and Bostock v. Clayton County (holding that discrimination based on sexual orientation can be sex discrimination, but here extending the holding to single-sex intimate spaces, employers’ and employees’ right to express the binary nature of sex, and employees’ rights to religious accommodations). Also described are the scope of liability under the Pregnant Workers Fairness Act; and cases where there is a federal circuit split on an NEP priority or in which the agency is seeking Supreme Court resolution.

    Key takeaway: The SEP’s “emerging issues” priority was forward-looking, oriented toward expanding protections for new categories of workers and new forms of discrimination. The NEP’s emerging-issues equivalent is backward-looking in a sense and is focused on limiting the scope of recent legal developments (like Bostock) and on targeting what it views as overreach by prior EEOC leadership.

    Priority 3: Vulnerable Workers

    The third priority is a focus on vulnerable workers, “including teenage workers, persons with limited literacy or education, individuals employed in low wage jobs, survivors of sexual assault, and workers with developmental or intellectual disabilities.”

    Key takeaway: The NEP’s vulnerable worker category is dramatically narrower than the SEP’s version. Several populations that the SEP previously singled out for “focused attention” no longer make the cut, including LGBTQI+ individuals, immigrants, people with arrest records, and older workers. Employers who relied on the SEP’s expansive vulnerable-worker framework to anticipate enforcement activity should consider recalibration.

    Priority 4: The Commission’s Enforcement Process

    The fourth priority is a focus on cases “involving the integrity or effectiveness of the Commission’s enforcement process, including cases involving: claims of retaliation; cases where a respondent’s “defense is rooted in a challenge to a Commission policy documents;” cases “protecting Commission access to information,” such as subpoena enforcement actions (which we have already seen increase this year); cases involving breaches of Conciliation Agreements or Consent Decrees; and cases involving violations of recordkeeping and reporting requirements.

    Key takeaway: This priority reflects the Commission’s view of itself as a law enforcement agency, and apparent desire to maintain the integrity of the investigative and enforcement process.  Employers should continue to be on the lookout for retaliation claims, which we have already seen increase in popularity over the last several fiscal years. We also expect the EEOC will be paying particular attention to compliance with the terms of settlements with the government; something that in the past was often an afterthought.

    Priority 5: Amicus Briefs in Cases Involving Religious Discrimination

    Interestingly, this priority specifically applies to cases where the EEOC may serve as an amicus.  The EEOC will look at “matters involving religious organizations and religious employers” where it can “clarify the constitutional and statutory limitations regarding liability under the statutes it enforces.”

    Key takeaway: This priority relates to other priorities involving claims of religious discrimination and accommodations for sincerely held religious beliefs of employees, and the Chair’s Priority, discussed below, regarding protecting workers’ religious liberty rights.

    Priority 6: “Evenhanded Enforcement”

    This priority says that the EEOC “should ensure evenhanded enforcement of the civil rights laws enforced by the agency, mindful that as public servants, EEOC staff are working on behalf of all American workers protected by these laws.”

    Key takeaway:  This — alongside the NEP’s citation to Ames v. Ohio Department of Youth Services (which addressed majority-group standing under Title VII) — signals that the EEOC does not view enforcement limited to historically disadvantaged groups, and that the agency will be more willing to bring cases where the charging party is in a majority group (i.e., white employees, men, US-born workers).  Indeed, as detailed elsewhere in the NEP, the EEOC is expected to prioritize claims by majority-group workers and claims related to DEI practices.

    VI. What Else is Missing from the NEP?

    Notably absent from the NEP is a priority related to access to justice.  The SEP’s access-to-justice priority was a major driver of EEOC challenges to broad arbitration agreements and restrictive settlement terms. Its absence from the NEP could signal a meaningful de-escalation on these fronts.

    After years of being an EEOC focus, equal pay has not survived as a named enforcement priority. While the EEOC retains jurisdiction over equal pay claims, the absence of this priority from the NEP likely means fewer proactive systemic investigations in this area.

    Under the SEP, AI and machine learning in hiring were top enforcement concerns, but they are not identified as a standalone priority in the NEP, nor is AI even mentioned in the NEP.

    VII. The Four “Chair Priorities”

    The NEP introduces a new mechanism: “Chair Priorities,” designated by Chair Lucas and subject to change at the Chair’s discretion. The initial four are:

    1. Remedying DEI-related race and sex discrimination;
    2. Protecting American workers from anti-American national origin discrimination;
    3. Defending women’s rights to single-sex spaces at work and workers’ rights to express the binary nature of sex; and
    4. Protecting workers’ religious liberty rights.

    The SEP had no comparable mechanism for individual-Commissioner-designated priorities. Under the SEP, priorities were set by Commission vote and required a majority to modify.  The Chair Priority mechanism appears to give the Chair a more agile tool for directing enforcement focus without a full Commission vote, and subject to change at any time for any reason.

    VIII. What Employers Should Consider Now

    Based on our analysis of both documents, here are the critical action items:

    1. Revisit DEI. The NEP provides a specific enforcement roadmap. If your organization uses diverse slates, demographic-linked compensation, mandatory diversity statements, race- or sex-conscious evaluation rubrics, or restricts access to programs based on protected characteristics, these are squarely in the agency’s sights.  There is significant disagreement on what is lawful in this space, but being aware of this as an enforcement target is an important consideration.

    2. Revisit Religious Accommodation Processes. The NEP and Chair Priorities elevate religious liberty to a top enforcement concern, specifically invoking Groff v. DeJoy. Employers should review their processes in this area to ensure compliance with Title VII.

    3. Review Guest Worker and Visa-Related Hiring Practices. The NEP’s focus on “anti-American national origin discrimination” and preferencing of visa holders is new territory for the EEOC.  Employers should pay attention to job postings, staffing contracts, and hiring workflows in light of this EEOC focus.

    4. Prepare for Centralized, Coordinated Enforcement. The elimination of District Complement Plans and the creation of a national deployment model means enforcement actions may be more strategic and better-resourced.  Employers should not assume that a District office’s historical enforcement posture will predict its future activity.

    5. Monitor Executive Orders. The EEOC has now been clear that it is taking its enforcement cues from the Administration.  Tracking Executive Orders is now, functionally, an EEOC compliance exercise.

    6. Don’t Neglect the Priorities That Survived. Protections for vulnerable workers (particularly teenage workers, low-wage workers, and workers with developmental disabilities) remain in the NEP.  The EEOC will continue to process the hundreds of thousands of charges it receives annually across all bases. The NEP shifts priorities but it does not eliminate the agency’s statutory obligations.

    Implications for Employers

    The transition from the SEP to the NEP is a wholesale reorientation of the government’s primary workplace anti-discrimination enforcement agency. The SEP’s six broad priorities — built around systemic barriers, vulnerable communities, emerging social issues, and access to justice — have been replaced by a leaner, more politically charged set of priorities centered on DEI enforcement, religious liberty, the binary nature of sex, and the protection of American workers over visa holders. Employers should pay close attention to the new priorities we have described above, and batten down the hatches for what could be swift enforcement of these areas.

    We will continue to monitor implementation and will update this space as enforcement actions and litigation emerge under the new framework.

    [1] Democratic commissioner Kalpana Kotagal voted against the NEP.

    [2] In practice, this translates to charges brought by US-born workers involving claims of national origin discrimination where a charging party challenges hiring practices based on a preference for foreign workers or PERM recruitment practices or policies.

    Recent public debate following the Federal Court’s decision in Giggle v Tickle has prompted a private member’s bill introduced on 25 May 2026 by a National Party MP seeking to amend the Sex Discrimination Act 1984 (Cth) (SDA). The bill seeks to introduce clearer, and in some contexts prioritised, protections based on biological sex—particularly in areas such as single-sex facilities, services and spaces. The Coalition has indicated support for these changes.

    While the bill’s prospects remain uncertain, it raises important questions for employers about how potential legislative change may intersect with existing workplace obligations.

    A shifting legal landscape

    At present, the SDA protects individuals from discrimination on the basis of both sex and gender identity. Employers are therefore required to ensure that workplace policies and practices do not unlawfully discriminate on either ground.

    The proposed amendment signals a potential shift towards giving primacy to biological sex in specific contexts. Even if the legislative change is not enacted in its current form, the broader policy debate reflects increasing scrutiny around how competing protected attributes are balanced in practice.

    For employers, this highlights the importance of remaining agile and informed as the legal landscape evolves.

    Workplace impact: where issues may arise

    Although the proposal is focused on areas such as bathrooms, accommodation and certain services, there are clear overlaps with workplace settings. Employers may need to consider how any changes could affect:

    • Workplace facilities – including access to bathrooms, change rooms or other sex-specific spaces
    • Policies and procedures – particularly diversity, inclusion, anti-discrimination and workplace behaviour policies
    • Dress codes and uniform requirements
    • Participation in workplace programs or initiatives that may be sex- or gender-specific

    In many cases, these issues already require careful navigation. Any legislative amendment may add further complexity rather than providing a simple resolution.

    Managing competing rights and obligations

    A key challenge for employers is balancing potentially competing rights—particularly where the rights of individuals based on sex and gender identity may intersect.

    Employers should be mindful that:

    • Anti-discrimination obligations will continue to apply, even if their scope changes
    • Work health and safety duties require employers to provide safe working environments for all employees
    • Respectful workplace expectations remain critical, regardless of legal developments

    Even if reforms prioritise biological sex in certain contexts, this will not eliminate the need for careful, case-by-case assessment and sound judgement.

    Practical considerations for employers

    In light of this development, employers may wish to proactively consider:

    • Policy review: Are existing policies sufficiently clear, current and adaptable to potential legal change?
    • Consistency: Are workplace decisions being made consistently and in line with documented policies?
    • Training and communication: Are managers equipped to navigate sensitive issues lawfully and appropriately?
    • Escalation processes: Are there clear pathways for handling complaints or conflicts involving competing rights?
    • Documentation: Are decisions well-reasoned and recorded, given the potential for scrutiny?

    Taking a proactive approach can help mitigate risk, regardless of whether legislative reform proceeds.

    The continued role of judgement and expertise

    Importantly, even with increased legislative clarity, these issues are unlikely to become purely rules-based. Many workplace scenarios will still require nuanced judgment, taking into account legal obligations, organisational context and employee wellbeing.

    For employers, this underscores the ongoing importance of seeking legal guidance when navigating complex or sensitive situations.

    Looking ahead

    The proposed amendment is part of a broader and evolving national conversation about the scope and operation of discrimination law. Whether or not this particular bill is passed, it highlights the potential for change and the need for employers to stay informed.

    We will continue to monitor developments and provide insights as the position becomes clearer.

    Episode 04: How Flashpoint Issues Are Redefining Workplace Investigations

    Hosted by Sam Schwartz-Fenwick with special guest Ann Marie Zaletel

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    As workplaces become increasingly shaped by complex social, political, and cultural dynamics, employers are facing a rising number of investigations tied Flashpoint issues. In this episode, host Sam Schwartz-Fenwick sits down with Ann Marie Zaletel to unpack what distinguishes these investigations from traditional workplace matters – from heightened legal risk and public scrutiny to the intense emotions and reputational stakes involved.

    Drawing on real-world experience, Sam and Ann Marie explore why these matters are more likely to escalate into high-profile disputes and how the investigative process itself can influence outcomes. This conversation underscores why a thoughtful, nuanced approach is essential – not only to mitigate risk, but to maintain trust, workplace stability, and organizational integrity in a polarized environment.