In the March 2026 update, we see employers facing legal uncertainty as regulators and courts redefine compliance boundaries, from workplace benefits and data security to wage rights. Read the details below:
Data Breach Lawsuit Against Philadelphia Aging Nonprofit Highlights Rising Employer Liability Risks
The Philadelphia Corporation for Aging is facing a proposed class action lawsuit alleging it failed to adequately protect employees’ sensitive personal information, leading to a significant data breach. The complaint, filed in the Court of Common Pleas of Philadelphia County by Carl Dunbar, claims the nonprofit’s negligence exposed workers’ personally identifiable information (PII) to cybercriminals.
According to the lawsuit, the breach was detected in July, but affected employees were not notified until November, leaving them vulnerable to identity theft and financial harm for months. The compromised data reportedly includes Social Security numbers, financial account details, medical information, and other highly sensitive records.
Dunbar alleges that PCA failed to implement reasonable cybersecurity safeguards and did not disclose the root cause of the breach, further compounding the harm. The suit also claims the organization violated its contractual obligations to employees by not securing their data.
The complaint warns that the stolen information could circulate on the dark web or be used for fraud and unauthorized purposes. Plaintiffs argue the breach could have been prevented with stronger security measures or by limiting the storage of sensitive data.
For employers, the case underscores growing legal and reputational risks tied to data security. Companies are increasingly expected to adopt robust cybersecurity practices, minimize the collection and retention of sensitive information, and provide timely breach notifications. Failure to do so may not only trigger litigation but also erode employee trust and invite regulatory scrutiny.
New Jersey Supreme Court Rules Wage Laws Protect Unauthorized Workers
The Supreme Court of New Jersey unanimously ruled that workers are entitled to wages under state law regardless of immigration status, reinforcing broad protections under New Jersey’s wage and hour statutes. The decision revived a lawsuit filed by Sergio Lopez, who sought unpaid wages from Marmic LLC after performing work as a superintendent. The court remanded the case to determine damages, overturning a lower court ruling that had dismissed his claim.
The justices held that the Immigration Reform and Control Act does not prohibit employers from paying undocumented workers for labor already completed. They emphasized that denying such wages would undermine both federal and state law by incentivizing employers to exploit
undocumented workers. Under New Jersey law, Lopez qualified as an employee and was therefore entitled to compensation for services rendered.
The court also rejected arguments that Lopez’s use of an invalid Social Security number invalidated his claim, stating that wage protections apply even when workers lack proper documentation. Additionally, the court distinguished the Hoffman Plastic Compounds Inc. v. NLRB decision, clarifying that it applies only to back pay for work not performed, not unpaid wages for completed labor.
EEOC Upholds Limits on Gender Dysphoria Coverage, Citing Supreme Court Precedent
The U.S. Equal Employment Opportunity Commission (EEOC) ruled in a 2–1 decision that the Office of Personnel Management did not violate federal civil rights laws by allowing health plans to limit coverage for gender dysphoria treatments. The majority based its reasoning on a recent U.S. Supreme Court ruling in United States v. Skrmetti, which upheld Tennessee’s restrictions on gender transitioning medical care for minors. The EEOC concluded that decisions based on medical diagnoses like gender dysphoria are not inherently discriminatory under Title VII of the Civil Rights Act.
The ruling overturns a prior EEOC decision that had found OPM’s policies unlawful. Commissioners Andrea Lucas and Brittany Bull Panuccio formed the majority, emphasizing that OPM acted rationally in balancing cost, medical considerations, and insurer discretion. They also rejected claims under the Rehabilitation Act, citing a safe harbor provision.
Dissenting Commissioner Kalpana Kotagal argued the decision undermines transgender protections and misapplies precedent, including Williams v. Kincaid. She criticized the majority’s reasoning and language, calling it inconsistent with civil rights principles and medical consensus.
The case is Sam T. et al. v. Scott Kupor before the U.S. Equal Employment Opportunity Commission.
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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