Stay Ahead of the Curve: Essential Employment Law Updates for Retailers in 2026

Quick Hits

• California and New York are implementing stringent measures to curb “stay or pay” contracts.
• A Florida appellate court ruled the state’s open carry ban unconstitutional, allowing open carry throughout the state.
• Maryland issued final regulations for its mini-WARN Act, which includes provisions for remote employees.
• New pay transparency laws in New Jersey, California, Delaware, and Washington require employers to disclose pay and benefits information in job postings, with violations resulting in warnings and civil penalties.

Stay-or-Pay Contracts in Flux

Significant changes in employment law are on the horizon, particularly concerning “stay or pay” contracts, and retailers must stay alert. These agreements require employees to reimburse their employers for benefits like sign-on bonuses or educational and training expenses if they leave the job within a specified period. Such contracts are increasingly facing scrutiny.

Spearheading this movement are California and New York, which have introduced stringent measures to curb the use of such contracts. California’s newly enacted law (Assembly Bill 692), effective January 1, 2026, is one of the strictest bans on employment-related debt, aiming to prevent employers from using repayment agreements that can deter workers from changing jobs. New York has also proposed a similar law (Bill A564C), which is currently awaiting the governor’s signature. These state-level initiatives emerge as federal regulators, including the Federal Trade Commission and National Labor Relations Board, have retreated from efforts to regulate these contracts nationwide under the new administration.

What implications does this hold for retailers? Many retailers depend on high‑volume hiring and frequently use sign‑on bonuses, onboarding training, and certification programs to prepare associates for the floor. Repayment provisions that once helped to reduce early attrition may be restricted or even unenforceable in key markets. 

Florida’s New Open Carry Law

On September 10, 2025, a Florida appellate court ruled that the state’s open carry ban is unconstitutional. This ban made it unlawful for individuals to openly carry firearms or electric weapons, with some limited exceptions. The recent ruling effectively allows open carry throughout Florida, even though it technically only applies to the counties within the First District Court of Appeals. Following the ruling, the Florida Attorney General advised that open carry should be considered lawful statewide, and the Florida Sheriffs Association instructed deputies not to enforce the prior ban, except in specific prohibited areas such as government buildings, schools, and places where conduct is inconsistent with permitted open carry.

This decision does not prevent private employers from prohibiting open carry in the workplace, nor does it change existing laws that permit employees to store secured firearms in their vehicles. Retailers can still control the presence of weapons in the workplace and prohibit weapons on their properties, with violations potentially resulting in charges of armed trespass. However, the decision may complicate the enforcement of these policies due to increased media attention, political contention, potential reluctance from front-line employees, and public pressure through social media.

In response, retailers should consider several strategic actions when implementing or reaffirming policies related to firearms. These include clearly notifying employees and the public about the policies, particularly any prohibitions on carrying firearms, and ensuring these notifications are prominently displayed. It is also important to outline expectations and provide comprehensive training to employees, especially those on the front lines, to help them understand how to enforce these policies safely and effectively.

Maryland Enacts New Mini-WARN Act

Maryland recently issued final regulations for its mini-WARN Act, which requires employers with at least fifty employees provide sixty days’ written notice before making significant reductions in operations. These reductions are defined as either relocating a part of the operation or shutting down part of a workplace that affects at least 25 percent of the workforce or fifteen employees, whichever is greater.

Initially, the notice provisions were voluntary, but they became mandatory in 2020, with enforcement delayed until the final regulations were issued. These regulations, now in effect, closely align with federal WARN Act requirements and include specific provisions for remote and telework employees. However, unlike the federal WARN Act, Maryland does not recognize an exception for unforeseeable business circumstances.

Employers must notify all affected employees, unions, the State Dislocated Worker Unit, and the chief elected official of the political subdivision where the workplace is located, with penalties for non-compliance. Before any reduction in force, retailers operating in Maryland should consult with legal counsel to determine whether they meet the necessary thresholds, including considerations for remote employees assigned to Maryland locations.

EEOC Is Back in Business

With the U.S. Equal Employment Opportunity Commission’s (EEOC) quorum restored, employers can expect more high-profile investigations, broad data requests, and litigation targeting hiring, promotion, compensation, diversity, equity, and inclusion (DEI) programming, and accommodations.

Recent developments at the EEOC, aligned with the administration’s policy priorities, suggest an acceleration of cases targeting DEI programs focused on race and sex, along with a renewed prioritization of religious rights in the workplace. While commissioner charges (including leaked charges) increased during the period when the EEOC lacked a quorum and could not officially act, employers can anticipate an uptick in high-profile investigations, public prelitigation demands with broad data requests, and systemic lawsuits.

On November 6, 2025, President Donald Trump named Andrea R. Lucas as chair of the EEOC. The next day, the U.S. Senate confirmed Brittany Bull Panuccio as commissioner of the EEOC, restoring a quorum of three commissioners.

As the newly configured EEOC advances the president’s America First agenda, employers may want to reevaluate their DEI programming to ensure that initiatives are grounded in individualized, job-related criteria. Employers should consider reviewing their policies that address gender identity, access to facilities, and pronoun usage to ensure compliance with current federal, state, and local law. Furthermore, employers may want to reassess selection procedures, testing methods, and artificial intelligence tools for validation and defensibility, as well as audit accommodation and leave policies in alignment with potential revisions to the Pregnant Workers Fairness Act.

Employers may also want to prepare for increased attention to claims alleging religious discrimination, majority discrimination, or national origin discrimination and ensure that documentation and training support nondiscriminatory decision-making.

A Flurry of New Pay Transparency Laws

Employers looking to hire workers in New Jersey will need to comply with the state’s new pay transparency requirements. The New Jersey Department of Labor and Workforce Development issued proposed regulations under the New Jersey pay transparency law on September 15, 2025, which provide some (though not complete) clarity about the law’s pay and benefit disclosure requirements. The law, which went into effect on June 1, 2025, has two broad requirements (along with several exceptions): (1) an employer must disclose pay and benefits information in postings for “new jobs and transfer opportunities,” and (2) an employer must give notice of “promotional opportunities” to current employees in the affected department.

In October, California’s governor signed legislation (Senate Bill 642) that sets the statute of limitations for civil actions alleging violations of the state’s pay transparency requirements at three years, with a six-year “look-back” period to obtain relief for existing violations. In addition, the new law defines the “pay scale” that employers must disclose in job postings as a “good faith estimate” and expands the definition of “wages” to include all forms of compensation, including stocks and stock options.

On September 26, 2025, Delaware’s governor signed into law legislation (House Substitute No. 2 for House Bill No. 105) requiring employers in Delaware to include wage or salary ranges and information on benefits offered in job postings, making it the latest state to enact a pay transparency law. Employers found to have violated this law will receive a “written warning” for a first offense and could face civil penalties ranging from $500 to $10,000 for each subsequent violation.

The Washington State Supreme Court recently ruled that job applicants can sue for violations of the state’s pay transparency law without needing to prove they applied for the job in good faith or were otherwise “bona fide” applicants. In Branson v. Washington Fine Wine & Spirits, the plaintiffs brought a class action against a retailer that did not disclose pay information in job postings. In a 6-3 majority decision, the state’s high court held that an individual does not have to show that they are a “bona fide” or “good faith” job applicant. Instead, the court found that a job applicant is any individual who “submits a formal application or request for a job,” regardless of the applicant’s subjective intent to obtain employment.

Employers in these states may wish to carefully review their existing and future job postings to ensure compliance with state pay transparency laws.

Staying up to date with evolving employment laws is essential for retailers to ensure compliance. As regulations continue to change—particularly in areas such as “stay-or-pay” contracts, firearm policies, and mini-WARN laws, retailers must remain vigilant and proactive. By understanding and adhering to these legal requirements, retailers can mitigate risks, avoid penalties, and maintain a positive reputation with both employees and customers.

Ogletree Deakins’ Retail Industry Group will continue to monitor developments and will provide updates on the Retail blog as additional information becomes available.

The Ogletree Deakins Client Portal tracks developments and provides real-time updates on pay transparency. Full law summaries are available for Premium-level subscribers. Snapshots and Updates are available for all registered client-users. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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