On March 26, 2026, President Trump signed Executive Order 14398 (the Order), which is titled “Addressing DEI Discrimination by Federal Contractors”. The Order is the latest move in the Trump Administration’s attempts to target and eliminate what it deems to be unlawful DEI programs, practices and initiatives across a wide array of U.S. businesses, including federal contractors.
The Order and accompanying Fact Sheet specifically prohibit “racially discriminatory DEI activities” by all federal contractors and subcontractors at any tier. The Order states that DEI activities are not only unethical and often illegal, but also create inefficiency, waste and abuse for those that engage in DEI practices by adding unnecessary costs, creating workforce turnover and jeopardizing employee collaboration and problem-solving. The Order conveys the Administration’s perspective that while the federal government has made great strides in ending racial discrimination resulting from DEI activities, “some entities continue to engage in DEI activities and often attempt to conceal their efforts to do so.”
The Order follows on the Trump Administration’s anti-DEI Executive Orders issued in January 2025 that were aimed to curtail “illegal DEI,” including Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” EO 14173 was challenged and scrutinized by various courts for its failure to define what constitutes “illegal DEI.” That ambiguity left employers, higher education institutions and other organizations confused about their obligations and worried about the potential implications of crossing the line between what the Administration may interpret to be lawful and unlawful DEI practices.
Unlike the earlier Orders, this most recent Executive Order specifically defines the targeted conduct of “racially discriminatory DEI activities” as “disparate treatment based on race or ethnicity in the recruitment, employment (e.g., hiring, promotions), contracting (e.g., vendor agreements), program participation or allocation or deployment of an entity’s resources.” The Order further defines “program participation” as “membership or participation in, or access or admission to: training, mentoring or leadership development programs; educational opportunities; clubs; associations; or similar opportunities that are sponsored or established by the contractor or subcontractor.” While these definitions provide some guidance for federal contractors, ambiguity still exists as to how the Order will be applied with respect to contractors’ vendor agreements and the “allocation or deployment of an entity’s resources.” In addition, the Order does not make any reference to and is not tethered to any federal anti-discrimination laws.
Contractual Certification Requirements Under the Order
Under the Order, all Federal agencies are required, “to the extent permitted by law”, to include specific contract provisions in all contracts and “contract-like instruments.” The required standardized contract language, which is expected to appear in contracts as early as April 25, 2026, is as follows:
“In connection with the performance of work under this contract, [the contractor/appropriate party (contractor)] agrees as follows:
The contractor will not engage in any racially discriminatory DEI activities, as defined in section 2 of the Executive Order of March 26, 2026 (Addressing DEI Discrimination by Federal Contractors);
The contractor will furnish all information and reports, including providing access to books, records and accounts as required by the contracting agency pursuant to the Executive Order of March 26, 2026 (Addressing DEI Discrimination by Federal Contractors), for purposes of ascertaining compliance with this clause;
In the event of the contractor’s or a subcontractor’s noncompliance with this clause, this contract may be canceled, terminated or suspended in whole or in part, and the contractor or subcontractor may be declared ineligible for further Government contracts;
The contractor will report any subcontractor’s known or reasonably knowable conduct that may violate this clause to the contracting department or agency and take any appropriate remedial actions directed by the contracting department or agency;
The contractor will inform the contracting department or agency if a subcontractor sues the contractor and the suit puts at issue, in any way, the validity of this clause; and
The contractor recognizes that compliance with the requirements of this clause are material to the Government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code (False Claims Act).”
These provisions not only require contractors and subcontractors to certify that they will not engage in any “racially discriminatory DEI” activities, but they also place an affirmative obligation on prime contractors to monitor their subcontractors to ensure compliance with the Order and to report any potential violations. So, while the Order states that it is focused on preventing the inefficiencies of DEI practices, it imposes unusual flow-down obligations beyond the normal certification expectations with extensive monitoring and reporting duties to ensure that every subcontractor that they work with complies with the Order. Although the Order does not specify how contractors are expected to obtain this information, these policing mandates will likely lead to increased costs and risks for federal contractors.
Potential False Claims Act Liability and Other Penalties
The Order sets forth various penalties and enforcement mechanisms for contractors that engage in racially discriminatory DEI activities or otherwise fail to comply with Order. Federal contractors face cancellation, termination or suspension for noncompliance. The Order also authorizes suspension and even debarment for contractors that violate the Order.
Notably, violations of the Order may also place a contractor at risk of legal action from the Department of Justice (DOJ) through the False Claims Act (FCA), which carries the potential for significant financial damages. The Order expressly mentions that the contractual obligations are material to the government’s payments, which is an attempt to create a foundation for the materiality element under the FCA. The Order calls on the DOJ to consider bringing FCA claims against contractors that violate the Order and to conduct a prompt review of civil actions brought by private citizens, known as qui tam claims, under the FCA.
What to Expect and Next Steps
The Order clearly signals continued federal scrutiny of entities’ DEI programs and activities. Federal contractors will hopefully be gaining further guidance from the federal government regarding the Order’s expectations. The Order directs the Office of Management and Budget (OMB) to issue guidance to agencies to ensure compliance with the Order. While the Director of the OMB, the AG, the Assistant to the President for Domestic Policy and the Chair of the EEOC are directed to issue guidance on best practices for compliance with the Order, the Order also directs these agencies to identify economic sectors that pose a particular risk of engaging in “racially discriminatory DEI activities” based on current or past conduct.
The Order also directs the Federal Acquisition Regulatory Council (FAR Council) to amend the Federal Acquisition Regulation (FAR) to include the contract provisions of the Order and remove any conflicting or inconsistent terms in Federal procurement, solicitations and contracts subject to the Order. The FAR Council is also directed to, within 60 days, issue deviation and interim guidance regarding agency implementation of the Order’s contractual provisions prior to its finalization of the amendments to the FAR.
While the breadth of applicability of the Order to “contract-like instruments” is unclear, the Administration has pursued parallel, yet distinct efforts to impose similar certification mandates upon all recipients of federal financial assistance through proposed amendments to the System for Award Management (SAM). The General Services Administration (GSA)’s proposed amendments would require entities seeking federal grants and contracts to certify compliance with prohibitions against “illegal DEI.” Specifically, applicants utilizing the government’s award system would have to agree to: “Comply with the US Constitution, all federal laws and relevant executive orders prohibiting unlawful discrimination on the basis of race or color in the administration of federally funded programs.” The public comment period relative to those proposed changes closed on March 30. Once the Administration reviews and responds to that input, we may see new documents go into effect under the SAMS system.
Contractors should be aware of these requirements going forward and be prepared for the implementation of these new contractual provisions in future contracts. Additionally, it is yet to be seen what impact the provisions set forth in the Order will have on other obligations contractors may have under State contracts, such as requirements under the New York MWBE program. However, as previous Executive Orders targeting DEI have faced legal challenges, it is possible that this Order may face similar challenges.
Bond continues to follow these and related developments closely. Please contact Christa Cook, Gavin Gretsky, any attorney in Bond's labor and employment practice or the Bond attorney with whom you normally work, for questions, concerns and tailored consultation.
On March 31, 2026, U.S. District Judge Gerald J. Pappert of the Eastern District of Pennsylvania issued a significant decision enforcing an Equal Employment Opportunity Commission (EEOC) subpoena directed to the University of Pennsylvania (UPenn). Judge Pappert’s decision addresses the EEOC’s authority to obtain names and contact information for employees potentially affected by or witness to alleged antisemitic harassment. The ruling compels compliance with the subpoena, though it includes a limitation barring disclosure of any employee’s affiliation with any specific organization. The decision has potential implications for employers responding to EEOC investigations nationwide.
What the Court Held
The court held that the EEOC may compel production of employee names and contact information relevant to its charge alleging religious discrimination and hostile work environment, so long as UPenn does not reveal any employee’s ties to particular campus groups. In reaching its decision, the court emphasized the U.S. Supreme Court’s instruction to construe “relevance” in the subpoena context generously and rejected constitutional challenges to the demand. Notably, the decision reinforces the generous relevance and low burden standards governing EEOC subpoenas, confirming that courts will order compliance absent a showing of undue burden or clear overbreadth.
Background and Procedural Posture
Facts: The EEOC is investigating allegations that UPenn faculty and staff faced antisemitic harassment, including incidents connected to campus protests after the Oct. 7, 2023 attack in Israel and the ensuing war in Gaza. Unlike data on race and sex, employers are not required to maintain employment data regarding religion. The agency therefore sought evidence of names and contact details for employees associated with campus groups and academic programs “related to the Jewish religion,” staff who filed complaints, attendees of 2024 listening sessions held by the University’s antisemitism task force and recipients of a survey on antisemitism.
Prior Proceedings: After UPenn declined to produce certain categories—particularly contact information for employees whose identification could reveal their Jewish faith or affiliations—the EEOC filed a subpoena enforcement action. At a March 10, 2026 hearing, the court explained that the subpoena met the “low bar” for enforcement and has now granted the EEOC’s application, with a carveout precluding disclosure of affiliations with specific Jewish-related organizations.
Scope: This federal district court order binds the parties in this matter. While not precedential nationwide, it applies well-established Supreme Court standards for EEOC subpoenas and will be persuasive for employers responding to similar requests in other jurisdictions.
Key Takeaways
Legal Standard Clarified: Courts are likely to construe “relevance” to EEOC subpoenas generously and enforce requests for potential victim and witness contact information tied to a facially valid charge, rejecting constitutional challenges absent exceptional circumstances.
Compliance Exposure: Employers may be compelled to produce sensitive employee-identifying information in religion-based harassment investigations; failure to comply may risk enforcement actions and potential sanctions.
State-law Interaction: State privacy or employment laws rarely override federal subpoena obligations; however, employers should ensure awareness of applicable privacy requirements.
Who Is Affected
This decision primarily affects institutions of higher education and other employers facing EEOC investigations into religion-based harassment or hostile work environment allegations, in Pennsylvania and beyond. Employers operating across multiple jurisdictions should assess how local privacy frameworks and existing EEOC guidance intersect with the federal standards applied here.
Open Questions and Next Steps
Open issues include the contours of permissible privacy carveouts (such as limits on disclosing affiliations with specific organizations), the handling of highly sensitive identifiers and how courts will weigh undue-burden arguments tied to assembling contact lists. UPenn may seek further judicial review, and the EEOC may issue associated guidance. Employers should monitor any appellate activity in the case and be on the lookout for agency guidance.
Bottom Line
This decision reinforces the broad scope of the EEOC’s subpoena power and the low bar for the relevance standard governing enforcement. Employers should promptly review protocols and policies on how data on employees are maintained, update documentation where needed and train stakeholders on the applicable legal standards to reduce risk and position themselves for agency scrutiny under this framework.
The National Labor Relations Board’s decision in Cemex Construction Materials Pacific, 372 NLRB No. 130 (2023) was a paradigm shift in the law impacting employers when faced with a union’s demand for recognition as the bargaining representative of its employees. Three recent holdings address the viability and scope of that seminal decision.
Briefly restated, and as we have previously discussed (NLRB Further Erodes Employer Rights and Promotes Unionization), the Board’s decision in Cemex established a new liberal standard for issuance of a bargaining order remedy against an employer that refused to recognize a union, upon request, as the bargaining representative, if in fact the union had majority support, even in the absence of a union election. The Cemex Board also held that the employer could defend against this outcome by filing its own election petition (RM petition) to test the union’s majority status within 14 days of the union’s demand for recognition.
On March 6, 2026, the Sixth Circuit Court of Appeals ruled that the NLRB exceeded its authority in promulgating the Cemex standard. In Brown-Forman Corp. v. NLRB, the Court refused to enforce a Board order, holding that Cemex was “an unexpected, unlawful turn” that “was neither derived from the case-specific facts nor in furtherance of fashioning a remedy that resolved the parties’ dispute.” In effect, the Cemex standard was an unlawful exercise of rulemaking in the context of an adjudicatory proceeding.
While this decision is not a national precedent, it does represent a significant challenge to the viability of Cemex and may serve as the basis for other appellate courts to reject Cemex or perhaps serve as a vehicle for U.S. Supreme Court review.
In a related development, the NLRB in St. John’s College clarified the holding in Cemex by confirming that the 14-day timeframe for filing an RM petition does not limit an employer’s ability to file an RM petition after the 14 days have expired. There, the union presented the employer with a demand for recognition on December 14, 2023. Three months later, on March 13, 2024, the employer filed an RM petition. The Regional Director, however, dismissed the RM petition on the grounds that it was not “promptly filed” pursuant to Cemex.
In reversing the Regional Director’s dismissal of the RM petition, the Board clarified that Cemex’s “timeliness requirements pertain only to when the filing of an RM petition may shield an employer from potential unfair labor practice liability under” Cemex, and that Cemex should “not be construed to require” dismissal of otherwise properly filed RM petitions. Cemex creates the potential for unfair labor practice liability for an employer that rejects a union’s demand for recognition which can be countered by a “promptly filed” RM petition. However, the Board ruled that an employer may file an RM petition even after the 14-day window and that petition will be processed, potentially leading to an election to decide the union’s status.
Significantly, the Board did not address the issue of whether an unfair labor practice charge alleging a refusal to recognize and bargain with the union could be used to block an RM petition filed outside of the 14-day defensive window recognized in Cemex.
Finally, the potential for a bargaining order remedy under Cemex remains current Board law. In St. John’s College, the NLRB declined to rule on the employer’s argument that Cemex should be overruled. Further, in Lodi Volunteer Ambulance RescueSquad, another recent decision involving the Thryv remedy standard, the current Republican majority of the Board (Members Murphy and Mayer) agreed to apply Biden-era precedent in the absence of a three-member majority to overrule it. That result suggests that the Board is unlikely to revisit the Cemex decision any time soon because, as currently constituted, the NLRB has only three members and its traditional practice has been to require three members to overturn a precedent. (Member Prouty, who voted with the majority in Cemex, is not expected to vote to overturn that decision.)
While these decisions are positive steps toward limiting Cemex, employers should be attentive and seek professional advice promptly when presented with a union’s demand for recognition. There remains a clear and present risk of unfair labor practice liability and a bargaining order remedy.
If you have any questions about the information presented here, please contact Thomas Eron, Samuel Wiles or any attorney in Bond’s labor and employment practice or the Bond attorney with whom you are regularly in contact.
On Jan. 17, 2026, in one of his final acts in office, Governor Phil Murphy signed legislation amending the New Jersey Family Leave Act (NJFLA). The amendments expand access to job-protected family leave for New Jersey workers through an employer‑size threshold reduction, shorter eligibility requirements and potential new job‑protection implications tied to New Jersey Temporary Disability Insurance (TDI).
While the NJFLA’s core framework remains intact, these changes broaden coverage to private employers with 15 or more employees, and employee eligibility thresholds—both service time and hours—are reduced. Most changes take effect July 17, 2026, with employer‑size thresholds phased in through July 17, 2028.
NJFLA Overview
The NJFLA entitles eligible employees up to 12 weeks of unpaid, job‑protected family leave in a 24‑month period for the following purposes:
bonding with a child (beginning within a year of birth, adoption or foster care placement);
caring for a family member or someone who is the equivalent of family with a serious health condition;
caring for a family member (or equivalent) who is isolated or quarantined because of suspected exposure to a communicable disease during a state of emergency; or
providing care or treatment for a child whose school or place of care is closed by order of a public official due to an epidemic of a communicable disease or other public health emergency during a state of emergency.
Although NJFLA leave is unpaid, employees may be eligible for partial wage replacement through New Jersey Family Leave Insurance (FLI). Employees are entitled to reinstatement to the same or an equivalent position upon return from leave, and employers are prohibited from interfering with or retaliating against employees who exercise NJFLA rights.
Key Changes
Lower Employer Size Threshold
Beginning July 17, 2026, NJFLA coverage expands to private employers with 15 or more employees, reducing the threshold from 30. The threshold will decrease further on a phased basis: 1) July 17, 2027: 10 or more employees, and 2) July 17, 2028: 5 or more employees. New Jersey employees working for state or local government agencies of any size remain covered by the NJFLA.
Reduced Employee Eligibility Requirements
The amendments reduce the employee length-of-service requirement for leave eligibility from 12 months to 3 months and the hours worked requirement from 1,000 hours to 250 hours in the preceding 12 months.
Interplay with FMLA, Family Leave Insurance, and Temporary Disability Insurance
Employees who are eligible for New Jersey Earned Sick Leave and TDI or FLI benefits may elect the order in which they use those benefits. They may not use earned sick leave at the same time as TDI or FLI. NJFLA leave may run concurrently with leave under the FMLA, where applicable. However, unlike the FMLA, the NJFLA does not provide leave for an employee’s own serious health condition.
What New Jersey Employers Should Do Now
Employers should confirm whether they will meet the phased employer‑size thresholds in 2026–2028, therefore expanding NJFLA coverage to their employees.
Employers should also review and revise their existing leave policies to reflect the amendments by the effective date.
In further preparation for compliance, employers should consider providing training to supervisors, managers and/or human resources professionals that are responsible for attendance enforcement within their organizations. This will mitigate the risk of non-compliance, including retaliation claims, due to any misunderstandings of employees’ rights and protections under the NJFLA.
The New Jersey Division on Civil Rights is expected to issue updated guidance closer to the effective date. Employers should monitor developments closely.
Employers are encouraged to consult with counsel to understand how these changes affect their operations and to ensure policies are both compliant and strategically aligned. If you have any questions or would like additional information, please contact Sam Dobre, Mallory Campbell, Rachel Kreutzer or any attorney in Bond’s labor and employment practice or the attorney at the firm with whom you are regularly in contact.
On Dec. 19, 2025, Governor Kathy Hochul signed Senate Bill S8338 into law amending the New York State Human Rights Law (NYSHRL) to expressly recognize “disparate impact” claims in employment discrimination claims.
While New York courts had already recognized disparate impact liability, this amendment formally codifies the standard and aligns the NYSHRL with federal law (Title VII) and the New York City Human Rights Law.
What This Means
The amendment imposes liability where a facially neutral policy or practice has discriminatory effect on a protected group—regardless of any discriminatory intent. In other words, employers may face liability even absent a discriminatory motive if a policy disproportionately impacts a protected class. The law applies to conduct occurring on or after Dec. 19, 2025.
Legal Framework
Under the new subdivision of Executive Law §296:
Employee’s Burden: a plaintiff must show that a specific policy or practice has a disparate impact on a protected group, either in fact or predictably.
Employer’s Burden: if a disparate impact is shown, the employer must establish a “legally sufficient justification” by demonstrating that:
the policy is job-related and consistent with a business necessity; and
the business necessity cannot be achieved through a less discriminatory alternative. The justification must be supported by evidence—not speculation.
Employee’s Rebuttal: even if the employer meets this burden, an employee may still prevail by showing that a less discriminatory alternative exists.
Practical Takeaways for Employers
Employers should exercise caution in their increasing use of artificial intelligence (AI) in personnel or business decisions, as algorithmic screening, hiring, firing, promotion, discipline or compensation systems may unintentionally produce statistically disparate outcomes that give rise to disparate impact liability if not validated as job-related, consistent with business necessity and assessed for less discriminatory alternatives.
Policies that appear neutral on their face can still create liability if they disproportionately affect protected groups.
Employers should ensure that key policies (e.g., hiring criteria, background checks, compensation structures, scheduling practices) are tied to legitimate business needs and supported by evidence.
Where possible, employers should evaluate whether less discriminatory alternatives are available.
Documentation supporting the business necessity of policies will be critical in defending potential discrimination claims.
Next Steps
Given the expansion and codification of disparate impact liability, employers should consider proactively reviewing their employment practices, policies and job classifications to identify potential risk areas and ensure compliance with evolving state and local standards.
On Feb. 13, 2026, Governor Kathy Hochul signed an amended version of the Trapped at Work Act (the Act) into law. When signing the Act in December 2025, Governor Hochul flagged ambiguities in the original bill and conditioned her approval on the Legislature making amendments during the current legislative session. The amended Act resolves these ambiguities and places employers on more balanced footing regarding their obligations under the law.
The Act applies to “employment promissory notes,” which the Act defines as any instrument, agreement or contract provision that requires an employee to pay the employer if the employee’s employment relationship with a specific employer terminates before a stated period of time passes. The Act provides that requiring an employment promissory note as a condition of employment is unconscionable, against public policy, unenforceable and null and void. However, if an employment promissory note appears within a larger agreement, the remainder of the agreement remains intact.
Key Changes
Definitions of Employer and Employee
The Act now defines “employee” as any person employed for hire by an employer. This definition significantly limits the scope of the Act, as its initial iteration applied broadly to “workers," which included independent contractors and others.
The amendment revised the definition of “employer” to align with the Labor Law's standard definition (i.e., any person, corporation, limited liability company or association that employs any individual) and expressly includes the state and its political subdivisions.
Additional Exceptions
The amended Act clarifies that certain agreements will not be rendered void and unenforceable, including:
Agreements seeking repayment of tuition, fees and required materials for a “transferable credential” (i.e., widely recognized degrees, licenses, certificates or documented skill credentials that enhance employability across the industry and are not employer-specific requirements), provided the agreement contains the specific language discussed below.
Agreements requiring the repayment of a financial bonus (e.g., sign on bonuses), relocation assistance or other non-educational incentive, payment or benefit that is not tied to specific job performance. However, repayment cannot be required if the employer terminated the employee for any reason other than misconduct or if the employer misrepresented the job’s duties or requirements to the employee.
For employers to seek repayment from employees for tuition and educational materials, for "transferable credentials," an agreement between the employer and employee must satisfy the following requirements:
the agreement is set forth in a written contract that the employer offers separately from any employment contract;
the credential is not a condition of employment;
the agreement specifies the repayment amount before the employee agrees to the contract, and the repayment amount does not exceed the actual cost to the employer;
the agreement provides for prorated repayment over the required employment period that is proportional to the total repayment amount and the length of the required employment period without accelerating repayment if the employee leaves; and
the employer may not require repayment if the employer terminates the employee, unless the employer terminated the employee for misconduct.
Notably, the statute does not define “misconduct.” Employers that contemplate seeking repayment on this basis should apply well defined, consistently enforced standards and carefully document termination decisions.
Additional exceptions include: (1) repayment for any property that the employee voluntarily purchased or leased; (2) agreements tied to sabbatical leave for educational personnel; and (3) agreements entered into pursuant to a collective bargaining agreement.
What Happens if Employers Violate the Act?
An employee or prospective employee who is aggrieved under the Act may file a complaint with the Commissioner of Labor. The amended version of the Act maintains the same penalty range of $1,000 to $5,000 for each employee violation. However, the amended language now requires the Commissioner to consider the size of the employer, the gravity of the violation, previous violations, and the employer’s good faith basis for believing that the employer's actions were compliant when assessing the penalty. Importantly, each violation constitutes a separate offense, so employers should be aware of the potential financial exposure for repeated violations of the Act.
When is the Amended Law Effective?
The Act, as amended, changes the effective date from “immediately” to one year after the effective date of the 2025 law. Accordingly, the Act becomes effective on Dec.19, 2026.
Next Steps
Although the amended Act is not effective until Dec. 19, 2026, employers should develop a plan to review any potentially affected agreements and policies and make any necessary revisions before the effective date.
Throughout 2025, New York enacted several significant amendments to the state’s labor law, impacting contractors and subcontractors working on covered prevailing wage projects.
Expanding Coverage of Off-Site Custom Fabrication
On Dec. 20, 2025, Governor Hochul signed legislation amending New York’s prevailing wage law to expand coverage of off-site fabrication work.
Prior to this amendment, New York state regulators advised that prevailing wage requirements applied to off-site fabrication only if the work was "usually and customarily performed at the project site." Under this framework, off-site fabricators frequently could be treated appropriately as material suppliers and therefore falling outside the statute's coverage. In recent years, however, there has been a growing number of disputes over the coverage of off-site fabrication on public works projects in New York. The 2025 amendment is expected to put to rest some of these prior issues but may raise other new disputes based on the legislative drafting.
In any event, the new law expressly expands the scope of “public work” to now include certain "custom fabrication" performed off-site, even if that fabrication work takes place in a different state or jurisdiction. This extraterritorial application of the amendment is particularly notable, considering the limited authority and jurisdiction of state regulators in New York.
Nevertheless, under the amendment, workers performing covered off-site fabrication work must be paid the prevailing wage rate and fringe benefits established for the New York county where the project is located. (Note: The amendment appears to exempt projects falling under federal Davis-Bacon prevailing wage requirements.)
The statute defines “custom fabrication” as work that is solely and specifically designed and engineered for a covered public works building or work. Under the new law, covered custom fabrication includes, but is not limited to:
exterior and interior wall panel systems;
woodwork;
electrical systems;
plumbing systems;
heating, cooling, ventilation or exhaust duct systems;
rebar cages; and
mechanical insulation.
To be covered custom fabrication, the work must also constitute a “significant portion of the building or work" as delivered for installation or assembly. Under the new law, a "significant portion of the building or work" means portions or modules of the building or work – as opposed to smaller prefabricated components – that are delivered to the project site with minimal construction work remaining, other than the installation and assembly of such portions or modules.
It remains to be seen how effectively these cross-referenced definitions and (at times somewhat vague) terms can be applied in the real world on a construction project.
The amendment also impose new, extensive certified payroll obligations on contractors and subcontractors performing covered off‑site custom fabrication work. Further, the statute requires municipalities and state entities – the project owners – to report the following information to the Commissioner of the New York State Department of Labor (NYSDOL): (a) the name and address of off-site fabricators; (b) identification of the custom materials and quantities manufactured; (c) estimated and actual costs of fabricated materials; and (d) the number of workers used in fabrication.
The Governor’s Approval Memo noted an agreement with the legislature to clarify the scope of this bill, including exemptions for certain transportation and affordable housing related projects to mitigate costs associated with these essential projects. So, we expect to see further legislation addressing these points.
This new law becomes effective on June 18, 2026 (180 days from Dec. 20, 2025). In preparation for implementation, business entities should assess the impact and increased costs which will be associated with off-site fabrication work, as well as ensure compliance with heightened certified payroll documentation requirements and anticipate closer bid stage and construction phase scrutiny of whether off-site prefabricated work is covered under New York’s prevailing wage law.
Prevailing Wage Coverage for Delivery and Hauling of Concrete and Asphalt in NYC and Certain Other Counties
On Dec. 12, 2025, Governor Hochul signed legislation, requiring payment of prevailing wages and fringe benefits to drivers who are delivering and hauling concrete and asphalt to and from certain public worksites.
The law applies to covered activities in the five boroughs of New York City, as well as the counties of Nassau, Putnam, Suffolk, and Westchester. Covered activities include delivery, hauling, return trips (whether loaded or empty) and time spent loading and unloading.
(This amendment expands on prior recent changes to Section 220(3-a) of the New York labor law, which extended prevailing wage requirements to the hauling of "aggregates," i.e., sand, gravel, stone, crushed stone, dirt, soil, millings and fill to and from project sites. Historically such hauling had only been covered in limited circumstances.)
The 2025 legislation explicitly extends comparable coverage to now also includes concrete and asphalt hauling in the specified jurisdictions. The law took effect immediately on Dec. 12, 2025.
Contractors, subcontractors and hauling providers engaged in public works in the covered regions must comply with these new requirements. And they should anticipate potential cost impacts, bid adjustments and heightened scrutiny of certified payrolls and hauling arrangements from New York regulators. Among other things, businesses working in this area should consider:
Updating procurement and contracting workflows to appropriately incorporate the new prevailing wage obligations for concrete and asphalt hauling in the covered jurisdictions;
Ensuring certified payroll processes capture loading and unloading time and return hauls;
Reviewing subcontractor and trucking agreements to require prevailing wage compliance and adequate recordkeeping; and
Revisiting bid pricing, project budgets and schedules to account for the expanded coverage.
New Apprenticeship Requirements for Covered Renewable Energy Systems
Another new law - which took effect immediately upon Governor Hochul’s signature on Sept. 5, 2025 - imposes new apprenticeship requirements on all contractors and subcontractors performing construction work on “covered renewable energy systems,” which include:
Renewable energy systems (including solar and photovoltaic installations) of 1 MW or greater that receive renewable energy credits;
Offshore wind supply chain projects receiving funding from the New York State Energy Research & Development Authority (NYSERDA);
Certain “thermal energy networks”; and
Major utility transmission facilities.
This legislation extends the apprenticeship requirement – previously applicable only to thermal energy networks – to a broader renewable energy sector. For thermal energy networks specifically, the new law additionally requires the use of pre-apprenticeship direct entry providers registered with NYSDOL.
All covered contractors and subcontractors must use apprenticeship agreements as defined under Article 23 of the New York Labor Law. Among other things, such apprenticeship programs and agreements are subject to review and approval from NYSDOL.
This is a significant requirement for many contractors and subcontractors who have limited access to apprentices and approved apprenticeship programs in New York.
The Governor's Approval Memo acknowledged that the immediate effective date "poses challenges" and indicated that the state Legislature agreed to enact subsequent amendments to provide flexibility where apprentice availability may be insufficient. We intend to report on this issue.
Owners, developers and contractors engaged in covered renewable energy projects should verify that all contractors and subcontractors hold compliant apprenticeship agreements for construction work as necessary. For thermal energy network projects, these entities must additionally confirm the use of NYSDOL registered pre-apprenticeship direct entry providers.
We expect further changes to New York’s prevailing wage law in the future. Impacted businesses should work with legal counsel to assess their potential compliance obligations arising under the above amendments. If you have questions about the legislation discussed above, please also feel free to contact Andy Bobrek or Rebecca J. LaPoint.
On January 5, 2026, the United States Department of Labor (DOL) issued an opinion letter (FMLA2026-2) clarifying whether time spent traveling to and from medical appointments may qualify as protected leave under the Family and Medical Leave Act (FMLA). The DOL concluded that employees may use FMLA leave not only for the medical appointment itself, but also for travel time reasonably necessary to obtain treatment for a qualifying serious health condition.
The FMLA entitles eligible employees up to 12 weeks of leave during any 12-month period for the treatment of “serious health conditions” and to care for certain family members with a serious health condition. A “serious health condition” generally involves overnight hospitalization, inpatient care and continuing treatment from a medical provider, as defined by the statute and implementing regulations. Examples of qualifying serious health conditions may include cancer, diabetes, Alzheimer’s disease, pregnancy and certain mental health conditions. Time spent attending medical appointments to diagnose or treat a qualifying serious medical condition is a recognized and permissible use of FMLA leave.
The FMLA also permits eligible employees to take leave to care for a qualifying family member—defined as a spouse, child or parent—with a serious health condition. This caregiving leave may include accompanying a qualifying family member to medical appointments related to the diagnosis or treatment of the serious health condition.
The DOL’s Opinion on Travel Time under the FMLA
The January 5, 2026 DOL opinion letter reasoned that travel to and from a health care provider is essential for obtaining care and continuing treatment. As a result, the DOL concluded that FMLA leave may be used “not only for the actual appointment, but also the time traveling to and from the appointment.” The DOL further explained that the same principle applies when an employee travels to and from a qualifying family member’s medical appointment when treating a serious medical condition. Importantly, only travel time directly related to obtaining or providing covered medical care qualifies for FMLA protection and will be considered an appropriate use of leave time.
The DOL cautioned, however, that FMLA protection does not extend to travel time that contains travel or stops for “unrelated activities.” By way of example, if an employee requests three hours of leave time for an appointment but spends one of those hours shopping or engaging in other personal errands, only the time reasonably related to the medical appointment would qualify as protected FMLA leave time.
The DOL opinion letter also addressed whether medical certifications must account for an employee’s travel time. The opinion letter explains that neither the FMLA nor its implementing regulations require a health care provider to include information regarding an employee’s travel time when completing a medical certification. To that end, the FMLA allows an employer to request “medical facts within the knowledge of the health care provider regarding the [employee’s] condition”. Because an employee’s travel time is not within the knowledge of the health care provider, the DOL states that a medical certification need not include information on travel time to be considered valid.
Recommendations
Employers should review and, where appropriate, update their leave policies and internal procedures to reflect that travel time to or from an appointment related to an employee’s serious health condition or to a qualifying family member’s serious health condition is appropriate leave under the FMLA. Employers should also ensure that human resources personnel and leave administrators understand that an employee’s medical provider is not required to document or quantify travel time in a medical certification and that the absence of such information does not render leave related to the travel time as invalid.
On Dec. 19, 2025, Governor Kathy Hochul signed Senate Bill S03072 (the Amendment) into law, amending the New York State Fair Credit Reporting Act to restrict the use of consumer credit history for employment purposes. With this amendment, New York joins ten other states and several major cities, including New York City, which have comparable laws currently in place. The Amendment will go into effect on April 18, 2026.
Restrictions on the Collection and Use of Consumer Credit History
Under the Amendment, employers, labor organizations and employment agencies are prohibited from requesting or using an applicant’s or employee’s consumer credit history for employment purposes or discriminating against an applicant or employee in any way related to their employment based on their consumer credit history.
Consumer credit history is defined as “an individual’s credit worthiness, credit standing, credit capacity or payment history as indicated by: (1) a consumer credit report, (2) credit score or (3) information an employer obtains directly from the individual regarding (i) details about credit accounts, including the individuals number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit or prior credit report inquiries or (ii) bankruptcy judgments or liens.”
The Amendment also defines a consumer credit report to include “any written or other communication of any information by a consumer reporting agency that bears on a consumer’s credit worthiness, credit standing, credit capacity or credit history.”
Exemptions under the Amendment
While the Amendment’s definitions and prohibitions regarding the use of consumer credit history are broad, there are limited exemptions for certain employers and positions, including:
An employer that is required by state or federal law, or a self-regulatory organization to use an individual’s consumer credit history for employment purposes;
Positions such as peace officers or police officers or positions with law enforcement or in an investigative function with a law enforcement agency;
Persons in a position with a high degree of public trust subject to background investigation by a state agency;
Persons in a position that requires security clearance under state or federal law;
Persons in a position that requires the employee to be bonded under state or federal law;
Persons in non-clerical positions that have regular access to trade secrets, intelligence information or national security information;
Persons in positions that have signatory authority over third party funds or assets valued at $10,000 or more or that involve a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer; and
Persons in positions with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.
However, employers should be aware that these exemptions are narrow and most only apply to specific positions, not to the employer or industry as a whole.
Impact on Local Laws
The Amendment also specifically states that it does not alter or exempt any employer, labor organization or employment agency duty to comply with any local law, ordinance or regulation regarding the use of consumer credit history where such laws provide greater protection for employees than those laid out in the Amendment.
This is particularly relevant for New York City employers because New York City’s Stop Credit Discrimination in Employment Act (SCDEA), which has been in effect since 2015, already places stringent restrictions on employers regarding the acquisition and use of consumer credit history for employment purposes. While the Amendment and SCDEA largely mirror each other, there are some differences. For example, SCDEA contains certain reporting requirements for exemptions that are not included in the Amendment. Therefore, New York City employers should be aware of both laws and be prepared to comply with whichever law offers the greatest protection to employees.
Restrictions on Consumer Credit Reporting Agencies
Aside from restrictions on employers, the Amendment also places limits on what kind of information consumer credit reporting agencies may provide under the New York State Fair Credit Reporting Act. Under the Amendment, reporting agencies are prohibited from providing consumer credit history in a consumer report for employment purposes unless one of the statutory exemptions listed above applies to the employer or position for which the information was requested.
Restrictions on State and Municipal Agencies
Lastly, under the Amendment, state and municipal agencies may not request or use the consumer credit history of an applicant, licensee or permittee for licensing or permitting purposes unless the agency is required to do so by law. However, the Amendment does not limit an agency’s ability to consider other information for licensing or permitting purposes such as an applicant’s, licensee’s, registrant’s or permittee’s failure to pay any tax, fine, penalty or fee that the person has admitted liability for, or for which a judgment has been entered by court or administrative tribunal, or any tax that a government agency has issued a warrant, lien, or levy on property.
While the Amendment does not take effect until April 18, 2026, employers should consider what steps they need to take to comply with these new restrictions. This includes reviewing current consumer credit history practices and identifying the applicability of any exemptions. As always, if you have any questions or would like any additional information, please contact Adam Mastroleo, Gavin Gretsky or any attorney in Bond’s labor and employment practice.
On Dec. 19, 2025, Governor Kathy Hochul signed the Trapped at Work Act (the Act) into law. This legislation, effective immediately, impacts agreements and policies that require employees to reimburse certain payments if they leave before the passage of a stated period of time.
What Does This Mean?
As a result of the Act, employers can no longer require employees or job candidates to sign an “employment promissory note” (i.e., an instrument, agreement or contract provision that requires a worker to pay the employer a sum of money if the worker leaves such employment before the passage of a stated period of time), as a condition of employment.
This change to New York’s labor law is expansive. The statute is clear that any future employment agreements demanding these types of payments as a condition of employment are unenforceable. In addition, according to the legislative history accompanying the bill, any existing agreements with “stay or pay provisions” are also unenforceable.
Who Does This Affect?
The Act broadly defines "employer" to include individuals, partnerships, associations, corporations, limited liability companies, trusts, the government and any organized group that hires or contracts with a worker for employment purposes. The term “employer” also includes any subsidiary or entity that is associated with an employer that provides training to workers.
“Worker” is also broadly defined to include an individual who is permitted to work for or on behalf of an employer, including employees, independent contractors, externs, interns, volunteers, apprentices and even sole proprietors who provide services on behalf of an employer.
What Are The Exceptions?
Under the Act, the prohibition on employment promissory notes or agreements specifically allows for the following types of employer reimbursements:
Repayment of payroll advances unrelated to training.
Payment for employer‑provided property sold or leased to the worker.
Agreements tied to sabbatical leave for educational personnel.
Programs agreed to under a collective bargaining agreement.
What are the potential consequences for violations?
Employers that do not comply with the Act can face civil penalties from the New York State Department of Labor, ranging from $1,000 to $5,000 for each violation. Additionally, attorneys’ fees may be awarded to employees who successfully defend against an employer’s attempt to enforce a prohibited agreement in court. Importantly, employers should be aware that if these prohibited promissory notes are a part of a larger employment agreement, only the promissory note portion is invalid. This means that the remainder of an otherwise enforceable employment agreement will not be affected.
What’s Happening Now?
Upon approving the Act, Governor Hochul flagged ambiguities in the original bill and conditioned her approval on legislative amendments in the next session. On Jan. 6, 2026, the legislature introduced amendments that, if approved by the Governor, would permit the following:
Create a pathway for employers to seek repayment of tuition, fees and required materials for a “transferable credential” (i.e., widely recognized degrees, licenses, certificates or documented skill credentials that enhance employability across the industry and are not employer-specific)
Permit repayment of certain nonperformance incentive payments, such as sign on bonuses or relocation assistance, subject to carveouts favoring employees who are terminated for reasons other than misconduct or who were misled about job duties.
This means that, if adopted, employers would be permitted to seek repayment from employees for “transferable credentials” under the amended Act as long as:
the agreement is memorialized in a separate document;
the credential is not a condition of employment;
there is a strict cap on the recoverable amount;
the agreement provides for prorated amount that will not be accelerated upon separation; and
no repayment is owed if the employee is terminated, unless they were fired for misconduct.
The amended version of the Act maintains the same penalty range for potential violations of $1,000 to $5,000 for each employee violation. However, the amended language would require that the Commissioner consider the size of the employer, the gravity of the violation, previous violations and the employer’s good faith basis to believe that their actions were compliant when assessing the penalty.
Next Steps
Although the amended legislation is pending, it is crucial that employers remember that the current iteration of the Trapped at Work Act as signed by Governor Hochul on Dec. 19, 2025, is currently effective. Employers should review their existing agreements and practices to ensure compliance to avoid legal exposure. If you have questions about the Trapped at Work Act, please contact Robert Manfredo, Rebecca J. LaPoint, Joseph Vogt, any attorney in Bond’s labor and employment practice or the attorney at the firm with whom you are regularly in contact.
The U.S. Court of Appeals for the Second Circuit recently clarified how courts must evaluate an employee’s claimed religious beliefs when assessing requests for religious accommodations. In Gardner-Alfred v. Federal Reserve Bank of New York, 143 F.4th 51 (2d Cir. 2025), the court provided guidance on the evidentiary standards governing claims arising from COVID-19 vaccination mandates and related religious accommodation requests and/or exemptions. The decision emphasizes that disputes over the sincerity of an employee’s religious beliefs are typically fact-intensive and should not be resolved by courts at summary judgment where genuine credibility issues exist.
Factual Background
The Federal Reserve Bank of New York (the Bank) implemented a policy requiring all employees to be fully vaccinated against COVID-19, subject to medical and/or religious exemptions. Both named plaintiffs, Diaz and Gardner-Alfred, sought religious exemptions, which the Bank denied, and they were terminated thereafter.
Both plaintiffs sued under the Religious Freedom Restoration Act (RFRA), the Free Exercise Clause of the First Amendment, and Title VII, each of which requires proof that their objections stemmed from “sincerely held religious beliefs,” and that the Bank’s vaccination policy burdened or conflicted with those beliefs. The district court granted summary judgment in favor of the Bank on all claims, concluding that neither plaintiff had submitted sufficient evidence to establish the sincerity of their beliefs.
The District Court’s Ruling
As to Plaintiff Gardner-Alfred, the district court found that her claimed 20-year membership in the Temple of the Healing Spirit was unsupported by any meaningful details. She could not identify any other members, any events she attended or otherwise verify her involvement. The court also pointed to evidence that she had purchased a generic vaccine-exemption package available online. Based on the record, the court concluded that no reasonable jury could find her beliefs sincere.
The district court reached a similar conclusion with respect to Plaintiff Diaz, emphasizing evidence of secular motivations for avoiding vaccination, inconsistent conduct with her stated beliefs and the fact that her pastor declined to support her exemption request. In the alternative, the district court ruled that no substantial religious conflict existed because the Pfizer and Moderna mRNA vaccines do not contain, and are not manufactured with, aborted fetal cells.
The Second Circuit’s Split Decision
On appeal, the Second Circuit affirmed summary judgment against Plaintiff Gardner-Alfred but vacated and remanded as to Plaintiff Diaz’s claims.
For Plaintiff Gardner-Alfred, the court described the case as one of the “rare circumstance[s]” in which a plaintiff’s testimony was so contradictory, incomplete and unsupported that it raised “only a sham issue of fact,” and no reasonable jury could find that her beliefs were sincere.
Plaintiff Diaz’s case was different. The Second Circuit held that while the evidence could raise doubts about her sincerity, the evidence did not compel a single conclusion. Instead, the record permitted competing reasonable inferences, which must be resolved by a jury—not a court.
In reaching that conclusion, the Second Circuit emphasized several key principles:
Mixed motives do not defeat sincerity. A jury could find that Plaintiff Diaz had both secular and religious objections to the vaccine yet still acted based on a sincerely held religious belief.
Inconsistent conduct is not dispositive. The court emphasized that “even the most sincere practitioner may stray from time to time.”
Clergy disagreement is not determinative. Plaintiff Diaz’s pastor refused to sign her exemption letter, but the court held that sincerity turns on the employee’s own beliefs – not the views of her religious leaders.
Use of a third-party religious organization’s letterhead does not automatically undermine sincerity. A jury could view Plaintiff Diaz’s persistence after her pastor’s refusal as evidence supporting sincerity.
Because reasonable jurors could reach different conclusions, the Second Circuit held that the question of Plaintiff Diaz’s sincerity must be decided by a jury at trial, rather than by the court on summary judgment.
Practical Takeaways for Employers
The Second Circuit’s opinion provides several signals and lessons for employers evaluating religious accommodation requests:
Summary judgment on sincerity will remain rare. Courts will only resolve sincerity as a matter of law in exceptional cases with overwhelming evidence of insincerity.
Inconsistent behavior alone is insufficient. Employers should not assume that deviations from religious practices defeat a claim.
Mixed motives do not negate religious beliefs. The presence of mixed motives does not eliminate legal protection.
Employers should document but not overreach. Employers should ask appropriate clarifying questions and carefully document the interactive process, while avoiding any attempt to assess the validity or correctness of an employee’s religious doctrine. Courts will closely scrutinize employer conduct that appears to cross the line from evaluating sincerity into acting as a theological gatekeeper.
Effective Dec. 5, 2025, the New York State Human Rights Law (NYSHRL) was amended to expressly prohibit retaliation against employees who request a reasonable accommodation.
Under the Americans with Disabilities Act (ADA), New York City Human Rights Law (NYCHRL), and the NYSHRL, employers are prohibited from retaliating against employees for engaging in a protected activity. Retaliation can include actions such as termination, demotion, reduction in hours, or any other adverse employment action taken in response to engagement in a protected activity.
To establish a prima facie case of retaliation under these statutes, a plaintiff must show that: (1) they engaged in “protected activity;” (2) their employer was aware that they participated in such activity; (3) they suffered an adverse employment action based upon their protected activity; and (4) there is a causal connection between the protected activity and the adverse action.
Courts have disagreed on whether a request for reasonable accommodation qualifies as protected activity to satisfy the first element of a retaliation claim:
ADA: Courts have long recognized that requesting a workplace accommodation constitutes protected activity.
NYCHRL: Following a November 11, 2019 amendment, the statute explicitly provides that a reasonable accommodation request is protected activity.
NYSHRL (prior to the 2025 amendment): Courts held that such requests did not qualify as protected activity. See, e.g., Jordan v. City of New York, 2024 U.S. Dist. LEXIS 214421 (S.D.N.Y Nov. 22, 2024); D’Amico v. City of New York, 159 A.D.3d 558, 558-59 (1st Dept. 2018); McKenzie v. Meridian Capital Group, LLC, 35 A.D.3d 676, 677-78 (2d Dept. 2006).
The 2025 amendment to the NYSHRL overturns that precedent. The statute now explicitly provides that requesting a reasonable accommodation is protected activity for purposes of retaliation claims. Consequently, any retaliatory action taken in response to such a request constitutes an unlawful discriminatory practice under the NYSHRL, bringing the statute into alignment with the ADA and NYCHRL.
