Caroline Burnett

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On April 27, 2026, a federal court paused enforcement of Colorado’s Artificial Intelligence Act (SB 24-205), placing one of the country’s most comprehensive state AI laws on hold while lawmakers reconsider its timing and scope. The order prevents the state from initiating enforcement actions during the pendency of the litigation, effectively freezing the law just weeks before its anticipated June 30, 2026 effective date.

This development is neither a repeal nor a permanent delay. Instead, it leaves employers in a familiar position—navigating a period of legal uncertainty while continuing to operate against a rapidly evolving regulatory backdrop. Importantly, even if the Colorado law is ultimately blocked or significantly revised, employers should not view the pause as a signal to deprioritize AI governance. As discussed below, the legal and regulatory risks associated with AI in employment remain very much in force.

Background

With the statute’s effective date approaching, a leading AI developer filed suit in April seeking declaratory and injunctive relief, challenging the constitutionality of several provisions of the Act. Shortly thereafter, the US Department of Justice intervened, arguing that aspects of the law impermissibly compel AI systems to adopt state‑defined viewpoints. The DOJ’s intervention marks the administration’s first litigation effort aimed at limiting state‑level AI regulation.

Continue Reading AI Regulation on Hold in Colorado—But Employer Risk Isn’t

Six months ago, our Back‑to‑School Guide on Recent Developments in Workplace DEI examined how the 2025 executive orders—and early guidance from the Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ)—led many US-based employers to recalibrate DEI-related risk, conduct DEI health checks, and fine-tune specific initiatives and practices.

In 2026, the risk is not coming from landmark court rulings declaring DEI unlawful. Instead, it is coming from enforcement tools: investigations, subpoenas, contract terms and leverage applied across multiple fronts—often before any litigation is filed.

That reality came into sharper focus on March 26, with the issuance of a new executive order further targeting “DEI discrimination” by federal contractors.

Workplace DEI remains lawful. But employers should expect heightened scrutiny of how programs are structured, incentivized, documented, and defended—through EEOC inquiries, administrative subpoenas, FCA theories tied to certifications, and discovery-driven litigation.

The New Executive Order Enhances DEI Risk for Federal Contractors

The White House’s new executive order—“Addressing DEI Discrimination by Federal Contractors”—creates new contractual obligations for federal contractors and subcontractors. Potential consequences include termination, debarment, and potential False Claims Act (FCA) exposure. The order (and the accompanying Fact Sheet) is operationally consequential: it ties compliance to federal contracting, expands agency access to contractor information, and more explicitly links compliance with these contractual obligations to FCA theories.

Continue Reading Why the New DEI Executive Order Matters for Federal Contractors—and Signals Broader Risk for All US Employers

The Argentine Senate has given preliminary approval to an ambitious Labor Modernization Bill that would meaningfully recalibrate Argentina’s employment law framework. The proposal introduces sweeping amendments to the Employment Contract Law and related statutes, with a clear policy focus on reducing informality and litigation, improving predictability around employment status, and enabling greater operational flexibility—developments that…

On March 20, the White House published a “National AI Legislative Framework” outlining policy recommendations for Congress to develop a unified federal approach to AI legislation and regulation. While our cross‑disciplinary AI team prepared a more detailed analysis (copied below), here is the employment‑law tl;dr:

  • No immediate legal change. The framework does not impose new obligations on employers, and it does not include draft legislation or an executive order directing federal agencies. Instead, it sets out legislative recommendations for Congress, reflecting the administration’s vision for a comprehensive federal AI statute.
  • Preemption is the through‑line. The recommendations are consistent with the administration’s December 2025 Executive Order and July 2025 AI Action Plan, and they expressly support broad federal preemption of state AI laws that impose undue burdens. At the same time, the framework contemplates carve‑outs to preserve states’ traditional police powers—such as protecting children and preventing fraud.

Takeaway for Employers

Unless and until Congress enacts federal legislation with preemptive effect, state and local AI laws remain fully in force. That matters: a growing number of jurisdictions already regulate how employers use AI in hiring, promotion, performance management, and other employment decisions—including California, Colorado, Illinois, and New York City, among others. For now, compliance remains a decidedly multi‑jurisdictional exercise.

For support developing your AI adoption strategies, including compliance with regulations outside of the US like the EU AI Act, please contact your Baker McKenzie employment lawyer.

White House Outlines AI Legislative Agenda with National AI Legislative Framework

By Brian Hengesbaugh, Justine Phillips, Lothar Determann, Keo McKenzie, Cristina Messerschmidt, Susan Eandi, Caroline Burnett, Joshua Wolkoff, Alysha Preston, Stanislav (Stan) L. Sirot, Brian Zurawski and Avi Toltzis

On March 20, 2026, the White House published a four-page document with “Legislative Recommendations” in its National Policy Framework for Artificial Intelligence (the “AI Framework”). The AI Framework does not include specific draft legislation or an executive order, but instead contains recommendations for Congress, setting out the administration’s vision for a comprehensive federal AI legislative package. The AI Framework is not legally binding either for on Congress or on private sector companies. The AI Framework, building on Executive Order 14365, outlines eight key policy areas for federal AI legislation aimed at preempting restrictive state laws and bolstering AI innovation.

Background

The AI Framework represents the latest significant step in the Trump administration’s technology agenda and is consistent with, and builds on, its past actions regarding the national AI strategy going back to the very first days of President Trump’s second term. Within the first week of returning to the presidency, President Trump revoked the Biden-era Executive Order 14110 on “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence”, which he swiftly replaced with Executive Order 14179 on “Removing Barriers to American Leadership in Artificial Intelligence”. Executive Order 14179 established the national AI policy to “sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security,” but provided few specifics.

Continue Reading What the March 20 ‘National AI Legislative Framework’ Means for US Employers Right Now

Our 2026 Looking Ahead Report explores the trends, developments, and emerging risks shaping financial services in the year ahead, covering topics like agentic AI in fintech, corporate fraud prevention, cybersecurity, workforce strategies, a regional spotlight on the Middle East and much more. Here is an excerpt:

Global workforce strategies for the financial sector

As financial institutions recalibrate their workforce strategies for 2026 and beyond, they face a rapidly shifting regulatory terrain shaped by geopolitical tensions, technological disruption and evolving societal expectations. 2025 has seen a marked acceleration in legal reforms and policy shifts across jurisdictions, with four key themes emerging at the forefront of employment and compliance planning. These trends are not isolated – they are interconnected, and they demand a proactive, globally attuned approach to workforce governance.

The Shifting DEI Landscape

While institutional diversity, equity and inclusion (DEI) programs and practices have been subject to more legal scrutiny in the US this year, other regions—particularly EMEA and parts of Asia—are deepening commitments and expanding regulatory requirements. Major US-based financial institutions have scaled back public commitments to DEI, rebranding or removing references to diversity figures and programs in corporate filings, amid heightened political scrutiny under the current US administration. In contrast, many financial institutions across EMEA remain committed to robust DEI frameworks. For example, the UK’s financial regulators have proposed regulatory standards to embed diversity and inclusion into governance structures. And in South Africa, financial and insurance activities is a sector specifically identified under new affirmative action targets now in force. This divergence underscores the need for multinational financial institutions to carefully navigate DEI policy and goals with regional nuance, balancing local regulatory pressures with global values and workforce expectations.

Employers, including those in the financial sector, are under pressure (from both employees and government authorities) to increase transparency, particularly on workforce composition and compensation. In Brazil, for example, equal pay enforcement has intensified, with hundreds of companies inspected in the last year. Some of the significant changes include the US, where certain states, including California, require gender pay reporting, and shareholder activism is driving pay equity disclosures. In the EU, the Pay Transparency Directive requires member states to implement legislation by June 2026, with gender pay gap reporting starting in June 2027. Key requirements include: mandatory pay range disclosure; banning salary history questions; and employee rights to pay information with an increased role overall for worker representatives.

Continue Reading What’s On the Radar for Financial Institutions in 2026?

This article was originally published by IAPP linked here.

When monitoring employees in the workplace in the U.S. and Canada, employers must be cognizant of their obligations under employment and data privacy laws. 

In the US, employers can mostly negate privacy expectations from developing in the workplace by providing clear notice of monitoring practices and which notice is required in certain states, such as New York. But under the California Consumer Privacy Act, data minimization requirements apply and monitoring practices must be justifiable as necessary and proportionate.

In Canada, employers are required to balance operational needs such as safety, security and productivity, with the privacy rights of their employees. Monitoring should be reasonable, proportionate and tied to a legitimate business purpose. Organizations must comply with applicable federal or provincial privacy legislation, which can include safeguarding any employee personal information collected, obtaining employee consent in certain circumstances, and providing notice to employees of monitoring practices. 

For federally regulated private-sector employers — such as banks, airlines and telecommunications companies — employee monitoring is generally governed by the Personal Information Protection and Electronic Documents Act. Provinces that have enacted privacy laws deemed “substantially similar” to PIPEDA are exempt from its collection, use and disclosure provisions under section 26(2)(b). Presently, only Alberta, British Columbia and Québec have privacy legislation that is substantially similar to PIPEDA.

US: A patchwork of requirements apply to employers

At the federal level in the U.S., employee monitoring is primarily governed by the Electronic Communications Privacy Act and the Stored Communications Act, which permit monitoring for legitimate business purposes but impose strict limits on unauthorized interception and access to private communications. Further, employers must conduct all workplace monitoring and surveillance in compliance with federal, state and local anti-discrimination laws. And, all employers, even those with a nonunionized workforce, must comply with the National Labor Relations Act when conducting workplace monitoring and surveillance. 

Continue Reading Employee Monitoring in the US and Canada: What Employers Need to Know

On December 11, 2025, President Trump signed an Executive Order on “Ensuring A National Policy Framework For Artificial Intelligence” (the “Order”). The Order represents the Administration’s latest and most pointed attempt to stop and reverse the wave of state AI legislation that has emerged over the preceding year, which the Order asserts “creates a patchwork of 50 different regulatory regimes.” The Order raises the political stakes regarding state AI laws and creates uncertainty in the form of anticipated litigation, but does not instantly remove current or impending state AI law obligations for companies developing or deploying AI.

Continue Reading Pre-emption by Executive Order: Trump Order Moves to Block State AI Laws

As California continues to set the pace for employment law regulation, 2026 looks to be another high-speed race filled with sharp turns and new obstacles. From restrictions on repayment agreements and expanded Cal WARN notice requirements to stricter pay equity rules, and much more, California employers are entering a compliance race where every second counts.

Fast Track to 2026: A 75-Minute Must-Attend Webinar for In-House Counsel

The legal landscape impacting California employers is evolving at breakneck speed. As we race toward 2026, employers need to stay agile, informed, and ready to shift gears. This high-impact session will cover the most pressing workplace trends, risks, and regulatory changes ahead for California…

The diversity, equity, and inclusion (DEI) landscape in the United States has undergone major shifts this year, driven by new executive actions, heightened regulatory scrutiny, deepening cultural and political divisions and emerging litigation trends. For legal practitioners advising employers, the past nine months have been marked by uncertainty, risk recalibration, and strategic decision-making.

This blog will bring you up-to-date on material developments and outline key takeaways for federal contractors and private companies from U.S. Attorney General Pam Bondi’s July 29 memorandum titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.”

Level Set: The Executive Orders and Federal Retrenchment

In January 2025, President Trump signed a series of executive orders (EOs) aimed at unlawful DEI programs, revoking race, ethnicity and gender-based affirmative action requirements for federal contractors, and directing public and private entities to end policies that constitute “illegal DEI discrimination.”

The EOs do not change existing federal discrimination laws, such as the bedrock prohibitions on discrimination in employment in Title VII of the Civil Rights Act of 1964 (Title VII). The EOs do not categorically ban any private employer DEI programs. Rather, the EOs direct federal agencies and deputize private citizens to root out (through investigations, enforcement actions, or False Claims Act (FCA) litigation) “illegal discrimination and preferences” and, for government agencies, to take particular actions. They reflect the policy view that many DEI policies violate federal anti-discrimination laws because these laws prohibit employment decisions based on certain demographic characteristics, while DEI may promote employment decisions on this basis. For more on the specific details of the EOs, read our blog, A Roadmap to Trump’s DEI Executive Orders for US Employers.

Catching Up: Legal Challenges to the Orders and Their Current Status

The EOs have faced multiple legal challenges, with various organizations and entities suing the Trump administration. In one of the most significant cases, a federal district court in Maryland issued a nationwide preliminary injunction blocking enforcement of three key provisions from Executive Orders 14151 and 14173 in February. Then, in March, the Fourth Circuit Court of Appeals stayed the injunction, allowing the Trump administration to enforce the executive orders while litigation continues. This week, oral arguments are being heard before a panel of Fourth Circuit judges.

As of September 22, 2025, several courts have issued contradictory rulings on the constitutionality of the EOs. The Supreme Court also determined that federal courts generally lack authority to issue nationwide injunctions, in its June 27, 2025 decision in the Trump v. CASA. Accordingly, the path for the Trump administration to enforce the EOs remains open. Federal agencies’ main enforcement mechanism under the EOs is terminating federal contracts and requiring federal contractors to certify that they do not operate any DEI programs that violate federal anti-discrimination law.

Following the Timeline: Breaking Down the Guidance from Federal Agencies and Recent Enforcement Activity

Over the last several months, federal agencies have been taking action to combat illegal DEI practices. Several agencies have sent companies requests to certify that they are not in violation of federal anti-discrimination law, and that this is material to the government’s funding decision, per the EO’s certification requirement.

Federal agencies, including the Equal Employment Opportunity Commission (EEOC) and the Federal Communications Commission (FCC), have also issued requests for information to certain companies (usually based on publicly available information) expressing concerns about their DEI practices. Requests have asked for information about various DEI-related topics, including hiring and promotion processes, diversity goals, application and selection criteria for fellowship programs, and participation in diversity internship programs.

In March, the FCC Chairman stated that the agency would use its “public interest” review of mergers and acquisitions to target companies with certain DEI programs. In response, several large telecommunications and media companies with pending mergers scaled back their DEI initiatives.

Also in March, the EEOC and the Department of Justice (DOJ) issued published a joint one-page technical assistance document entitled “What To Do If You Experience Discrimination Related to DEI at Work,” which provides examples of potential DEI-related discrimination under Title VII and directs employees who suspect they have experienced DEI-related discrimination to promptly notify the EEOC. Simultaneously, the EEOC also published a longer technical assistance document (“What You Should Know About DEI-Related Discrimination at Work”) with eleven questions and answers addressing the process for asserting a discrimination claim and the scope of protections under Title VII as they relate to DEI programs.

The joint guidance makes clear that any employment action motivated—in whole or in part—by an employee’s or applicant’s race, sex, or another protected characteristic, is unlawful discrimination, and the law does not distinguish between “reverse” discrimination against historically privileged groups and discrimination against minority or historically disadvantaged groups.[1] This guidance, while not binding, sets forth the agencies’ interpretation of the law, and as a result has influenced employer risk assessments and prompted internal reviews of hiring and promotion practices. (More here in our blog, EEOC and DOJ Issue Joint Guidance on DEI-Related Discrimination.)

In April, President Trump issued Executive Order 14281 directing federal agencies like the EEOC and the DOJ to deprioritize enforcement of anti-discrimination laws using the “disparate impact” theory of legal liability. Disparate impact is legal doctrine in US anti-discrimination law that allows plaintiffs to bring discrimination claims with respect to facially neutral practices that have a disproportionately adverse effect on members of protected groups—such as racial minorities or women—even if there is no intent to discriminate. It was recently reported that the EEOC plans to close by the end of month all pending worker charges based solely on unintentional discrimination claims and issue “right to sue” notices allowing plaintiffs to pursue those claims in court. This would mark another significant enforcement shift for the agency in recent months. The EEOC has already curtailed litigating and processing claims of discrimination based on transgender status under Title VII.

In May, the DOJ launched the Civil Rights Fraud Initiative, which uses the FCA to target entities that misrepresent compliance with federal anti-discrimination laws to receive federal funds. The FCA’s qui tam mechanism allows private citizens (relators) to sue on behalf of the federal government and share in any recovery. The DOJ has encouraged whistleblowers to come forward, and in recent weeks the DOJ has issued civil investigative demands (CIDs) to federal contractors and grantees seeking documents and information related to their DEI practices.

Most recently, on July 29, Attorney General Pam Bondi issued a memorandum to federal agencies entitled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” (DOJ Memo). The memo signals a substantial shift in how the DOJ intends to interpret and enforce federal anti-discrimination laws—particularly in relation to DEI initiatives. The memo itself does not have the force of law, instead it reflects how the DOJ interprets and intends to apply federal anti-discrimination law. While the memo is directed at educational institutions and private entities receiving federal funding, its examples of unlawful discrimination are relevant to all employers.

Continue Reading An Employer’s Back-to-School Guide on Recent Developments in Workplace DEI