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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

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

On July 31, the European Financial Reporting Advisory Group, published Exposure Drafts of the amended set of European Sustainability Reporting Standards (Draft Revised ESRS), and launched a public consultation seeking further feedback from stakeholders by September 29, 2025. The revision of the ESRS is one of the key simplification goals of the Omnibus proposal. EFRAG’s efforts revolved around the following levers:

  1. Simplification and streamlining of the Double Materiality Assessment (DMA).
  2. Enhanced readability/conciseness of the sustainability statements and better integration with corporate reporting as a whole.
  3. Modification of the relationship between minimum disclosure requirements (MDRs) and topical standards, resulting in a substantial reduction of datapoints (mainly in topical standards).
  4. Improved understandability, clarity and accessibility of the ESRS.
  5. Introduction of other suggested burden-reduction reliefs.
  6. Enhanced interoperability with other disclosure standards.

EFRAG explained that the simplification levers above were a result of careful consideration of stakeholder feedback, but it also noted that some of the stakeholder suggestions would go beyond EFRAG’s mandate, hence have not been addressed in the Exposure Draft.

Following the consultation, EFRAG must deliver the final technical advice on the revised ESRS to the EU Commission by November 30, 2025.

Recommendation on voluntary sustainability reporting standards for non-listed small and medium sized companies

On July 30, 2025, the EU Commission adopted a recommendation for non-listed SMEs and micro-companies that wish to voluntarily report sustainability information to do so in accordance with voluntary sustainability reporting standards for small and medium-sized companies (VSME) developed by EFRAG. In parallel, the EU Commission called on companies subject to CSRD to limit any information requests to SMEs in their value chains to information set out in the VSME.

Continue Reading European Sustainability Reporting Standards: Summer Update

On March 14, 2025, the Court of Appeals for the Fourth Circuit lifted the preliminary injunction blocking key provisions of President Trump’s executive orders related to diversity, equity, and inclusion (our summary of the DEI EOs is here). This decision temporarily reinstates the enforcement of Executive Orders 14151 and 14173, pending further appellate review.

Background

As discussed here, on February 21, a Maryland district court issued a nationwide preliminary injunction, citing concerns that the EOs were likely to violate the First and Fifth Amendments by chilling free speech and due process. The preliminary injunction had blocked the federal government from forcing contractors and grantees to certify that they aren’t promoting “illegal DEI.”

The government defendants immediately filed a notice of appeal with the Fourth Circuit, while also seeking a stay of the district court’s preliminary injunction. On March 3, the district court denied their request for a stay with Judge Abelson concluding that the potential harm of the orders outweighed the administration’s policy priorities.

The Fourth Circuit’s Panel Decision

The three-judge appellate panel unanimously stayed the injunction on March 14, with all three judges writing separate concurrences. There is an undercurrent in each opinion that the injunction came too early (for it’s unclear still what types of programs the government will try to eliminate) to determine if the government’s actions will implicate the First and Fifth Amendment concerns raised by plaintiffs. Also, the court takes the government defendant’s representations that the EOs are distinctly limited in scope and apply only to conduct that violates existing federal anti-discrimination law as true.

Continue Reading Fourth Circuit Allows Trump Administration to Enforce DEI EOs (For Now)

[UPDATE RE THE OMNIUS PROPOSAL HERE]

The European Union’s Corporate Sustainability Reporting Directive is a regulation requiring covered companies to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.

The CSRD impacts not…

SHRM reports that one in four organizations currently use AI to support HR-related activities, with adoption of the technology expanding rapidly. The compliance risks arising from generative AI use also are intensifying, with an increasing number of state and local laws restricting employer use of AI tools in the United States. And not to be outdone, substantial regulation impacting multinational employers’ use of AI is emerging in other parts of the world (e.g., the EU AI Act).

One rapidly growing use case is applicant recruiting and screening, a trend likely to continue given recent increases in remote hiring and hybrid work arrangements. AI tools can streamline talent acquisition tasks by automatically sorting, ranking, and eliminating candidates, as well as potentially drawing from a broader and more diverse pool of candidates.

Employers who use AI tools must comply with significant new (and existing) laws that focus on data protection, privacy, information security, wage and hour, and other issues. The focus of this blog, however, is the legislative efforts in the US to protect against algorithmic bias and discrimination in the workplace stemming from the use of AI tools to either replace or augment traditional HR tasks.

IL Becomes the Second State (After CO) to Target Workplace Algorithmic Discrimination

On August 9, 2024, Gov. Pritzker signed H.B. 3773, making it unlawful for employers to use AI that has the effect of discriminating against employees on the basis of protected class in recruitment, hiring, promotion, discipline, termination and other terms, privileges or conditions of employment. The law, effective January 1, 2026, also prohibits employers from using ZIP codes as a stand-in or proxy for protected classes.

Like Colorado, Illinois’ new law also contains a notice requirement: employers must notify applicants and employees when using AI with respect to “recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.”

Continue Reading Illinois Joins Colorado and NYC in Restricting Generative AI in HR (Plus a Quick Survey of the Legal Landscape Across the US and Globally)

In June, we offered our annual Global Employment Law webinar series sharing expert insights on the business climate in major markets around the world for US multinational employers. Baker McKenzie attorneys from over 20 jurisdictions outlined the key new employment law developments and trends that multinationals need to know in four 60-minute sessions.

ICYMI: click below to hear updates for the Americas, Asia Pacific, Europe and the Middle East and Africa and contact a member of our team for a deeper dive on any of the information discussed.

Session 1: The Americas 

Presenters: Andrew Shaw, Clarissa Lehmen*, Daniela Liévano Bahamón, Benjamin Ho, Liliana Hernandez-Salgado and Matías Gabriel Herrero

Click here to watch the video.

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.

Continue Reading Summer Replay: Tune In To Our Global Employment Law Update Series (Recordings Linked!)

On May 17, 2024 Colorado Governor Polis signed the landmark Colorado AI Act (Senate Bill 24-205) into law. Colorado is now the first US state with comprehensive AI regulation, adopting a classification system like the European Union’s recent AI Act. The law will take effect February 1, 2026. 

The law exempts small employers (fewer than fifty full-time employees) from some of its requirements but otherwise requires companies to take extensive measures to protect Colorado residents against harms such as algorithmic discrimination.

SB 205’s Details

SB 205 requires “developers” and “deployers” of “high-risk artificial intelligence systems” to use “reasonable care” to protect Colorado resident consumers from any known or reasonably foreseeable risks of “algorithmic discrimination.” As written, the law most likely applies to both creators of high-risk AI systems, as well as employers adopting high-risk AI technologies within their organization.  

Continue Reading From Brussels to Boulder: Colorado Enacts Comprehensive AI Law with Significant Obligations for Employers on the Heels of the EU AI Act

The regulatory landscape for immigration compliance is constantly evolving. To protect and keep top talent and to avoid tangles with the law, US multinational employers must stay on top of the latest legal decisions and guidance.

In this blog series, our team of Global Immigration and Mobility experts will share significant legal updates and practical strategies for maintaining compliance. In our first post, we highlight the possible implications of the SEC v. Jarkesy case for immigration courts, and highlight the DOJ’s recently-released Fact Sheet addressing I-9 compliance when using electronic platforms.

1. Challenge to the Validity of Administrative Judges Could Have a Major Impact on the DOJ’s Ability to Investigate Employers for Immigration Misconduct

    A case currently pending in the US Supreme Court could have high stakes for administrative law judges in the immigration context–and, depending on the outcome, could theoretically open the door for challenging the ability of the DOJ to investigate employers for immigration-based discrimination.

    Background

    On November 29, 2023, the US Supreme Court held oral argument in SEC v. Jarkesy. Jarkesy, an investment advisor, had been found guilty by an ALJ of securities law violations. As a result, he was fined, barred from securities industry activities, and his firm was required to repay investors. Jarkesy challenged the SEC’s enforcement action at the 5th Circuit, which agreed with Jarkesy, and the case was appealed to the Supreme Court. Notably, a core question before the Court is whether Congress’ decision to allow ALJs to be removed only for “good cause” violates Article II of the Constitution (requiring the President to “take Care that the Laws be faithfully executed.”)

    Possible impact on ALJs responsible for deciding cases involving immigration-based discrimination by employers

    During oral arguments, conservative justices expressed doubts about the constitutionality of the SEC’s current process, where ALJs handle violations and defendants are not entitled to a jury trial.

    The arguments that could potentially weaken the authority of ALJs in the Jarkesy case–i.e., that defendants are unconstitutionally deprived of a jury trial when administrative judges address infractions–could also be extended to ALJs sitting within the Office of the Chief Administrative Hearing Officer (OCAHO), potentially depriving them of their ability to adjudicate cases. Defendants are already using this argument in ongoing cases in an effort to invalidate the DOJ’s immigration-related proceedings against them.

    If the Supreme Court’s decision leads to the removal of ALJs at the SEC, it is likely that the authority of ALJs at other agencies will face subsequent legal challenges, including enforcement actions brought against employers by the DOJ for allegations of: (i) citizenship-based discrimination; (ii) national-origin-based discrimination; (iii) document abuse (relating to I-9s); and (iv) retaliation.

    Continue Reading Beyond Borders: How US Multinational Employers Can Master Immigration Compliance

    On Tuesday this week, the Federal Trade Commission (FTC) issued its highly anticipated final rule on noncompetes, imposing a near-total ban on worker noncompetes in the United States. Barring injunctive relief from legal challenges (which have already started), the rule will take effect 120 days from publication in the federal register.

    Interestingly, the rule exempts noncompete covenants entered into pursuant to a bona fide sale of a business. While “bona fide” is not defined in the final rule, the Supplementary Information for the rule explains that the FTC considered but rejected percentage and dollar minimum thresholds for the sale of business exception to weed out “exploitative and coercive” noncompetes and clarified that excepted noncompetes must be given “pursuant to a bona fide sale.” The Supplementary Information further explains that the FTC considers a bona fide sale to be one that is made between two independent parties at arm’s length, and in which the seller has a reasonable opportunity to negotiate the terms of the sale. In contrast, the FTC specifically calls out as problematic “springing noncompetes,” which apply to employees in the event of a sale and mandatory stock redemption or repurchase programs because the employee has no goodwill to exchange in the sale for the noncompete and no meaningful opportunity to negotiate at the time of contracting.

    Nevertheless, the bona fide sale exception is broad and preserves the status quo by allowing buyers in M&A transactions to obtain noncompetes from individual sellers in circumstances where such noncompetes are otherwise permitted currently. While the pending and anticipated legal challenges to the rule are significant and place the entire rule in jeopardy, the sale of business exception is not likely to be narrowed because of these challenges.

    So, what does this new regime mean for M&A?

    What Type of Noncompetes Are Impacted?

    The Supplementary Information confirms that the new rule does not apply to B2B noncompetes or nonsolicits. Instead, the focus of the rule is noncompetes with workers that limit their ability to work for others. So the rule does not impact current B2B agreements.

    Second, the FTC repeatedly makes the point that noncompetes must meet existing state and federal law restrictions (e.g., reasonable in scope and duration; limited to the goodwill to be acquired, etc.) to be enforceable, even if they otherwise fall within the sale of business exception in the new rule. This is the case because the FTC rule creates a new floor for noncompetes by preempting more lax state rules, but it does not preempt more stringent state laws or federal antitrust restrictions.

    Continue Reading Still Going Strong: M&A Noncompetes and the FTC’s Final Rule on Noncompetes