January’s employment law update spotlights a rapidly shifting compliance landscape – from aggressive state crackdowns on DEI and affirmative action, to a federal appeals court reinforcing limits on remote work as a disability accommodation, to fresh DOL guidance tightening the rules on overtime, bonuses, and exemptions. Find the latest information below.
Florida, Texas AGs Move to Block DEI and Affirmative Action Hiring Programs After High Court Ruling
The attorneys general of Florida and Texas issued opinions this month declaring diversity, equity and inclusion requirements unconstitutional and vowing not to enforce or, in Texas’ case, actively investigate programs tied to DEI or affirmative action. The opinions build on the U.S. Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard, which struck down race-based college admissions policies.
Florida Attorney General James Uthmeier said state laws that mandate race-based actions violate the Equal Protection Clause of the U.S. Constitution and the Florida Constitution. He singled out Florida Statute Section 110.112, which requires executive agencies to adopt affirmative action plans with race-based hiring goals, calling it among the most “egregious” examples of unconstitutional discrimination. Uthmeier said his office will not defend or enforce any such provisions.
Texas Attorney General Ken Paxton took a broader enforcement stance, pledging to investigate school districts, government entities and programs that use DEI or affirmative action. Paxton said he has already dismantled more than 100 state laws supporting DEI frameworks and criticized programs that prioritize grants or contracts based on race or sex, such as “historically underutilized business” initiatives. He said veteran-focused programs would remain unaffected.
Paxton also warned private employers that DEI practices could expose them to legal liability, urging institutions across sectors to eliminate race-based policies in favor of what he described as equal opportunity under the law.
Fourth Circuit Upholds Firing of Employee Who Sought Full-Time Remote Work for Failure to Perform Essential In Person Duties
The Fourth Circuit has affirmed the dismissal of an Americans with Disabilities Act lawsuit brought by a private aircraft services employee who alleged she was fired for seeking remote work while undergoing treatment for breast cancer. In a unanimous decision, a three-judge panel ruled that Wilson Air Center LLC lawfully terminated DeAnne Haggins because she could not consistently perform the in-person duties that were essential to her job, even with reasonable accommodation.
Haggins worked in accounts payable and shifted to remote work during the COVID-19 pandemic. After being diagnosed with aggressive breast cancer, she requested to remain fully remote due to her compromised immune system. As business activity picked up, Wilson Air asked her to return to a hybrid schedule to handle in-person tasks such as preparing checks, entering invoices and maintaining files. Although Haggins initially agreed, she largely failed to return to the office and did not consistently notify the company of her absences, the court found.
The panel concluded that Haggins was not a “qualified individual” under the ADA because she could not perform the essential functions of her role with accommodation. Her retaliation claim also failed, with judges noting the company repeatedly attempted to work with her before terminating her for job abandonment.
The case is Hall Haggins v. Wilson Air Center, LLC, case number 3:22-cv-00247, in U.S. District Court for the Western District of North Carolina.
DOL Opinion Letters Clarify Overtime Pay, Bonuses and Employee Exemptions
The U.S. Department of Labor’s Wage and Hour Division issued several opinion letters offering guidance on overtime, exemptions, and pay calculations, marking the first such letters signed by newly confirmed Administrator Andrew Rogers. Among the key takeaways, the agency clarified that certain bonuses must be included in overtime calculations when they are based on predetermined incentive plans rather than employer discretion. In a case involving the waste management industry, the DOL said bonuses tied to specific performance criteria are not discretionary and therefore must be factored into an employee’s regular rate of pay when calculating overtime, which should be paid at one-half the regular rate.
In another letter, the DOL addressed the classification of a licensed clinical social worker following an internal restructuring. While the agency noted that the worker’s duties likely met the “learned professional” standard for exemption, it emphasized that employees must also be paid on a salary basis to remain overtime-exempt. A shift to hourly pay could eliminate the exemption, even if job duties remain unchanged. The DOL also reaffirmed that employers may lawfully reclassify workers as nonexempt.
Additional letters covered commission-paid employees, the treatment of tips, collective bargaining agreements and pre-shift work, and the application of Family and Medical Leave Act rules. Legal experts said the guidance aligns with long-standing precedent and is unlikely to be controversial.
Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels businesses on commercial contract matters.
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