The Justice Department advised the Equal Employment Opportunity Commission (EEOC) that its disparate impact interpretative guidelines and regulations are unconstitutional. A United States District Court ruled that the increased H-1B visa fee was unlawful. The House of Representatives passed a bill designed to speed up the negotiating of a first contract between an employer and a union. The leadership of the National Labor Relations Board (NLRB) testified before a House subcommittee on their priorities.

Justice Department Says EEOC Disparate Impact Interpretative Guidelines Unconstitutional

The Department of Justice (DOJ) issued a memorandum in response to a request from the chair of the Equal Employment Opportunity Commission (EEOC) finding that the disparate impact interpretative guidelines and regulations issued by the EEOC are unconstitutional. The DOJ stated, "Rather than treating disparate impact as an evidentiary mechanism to smoke out intentional discrimination—imposing liability only when disproportionate adverse effects give rise to a strong inference of intentional discrimination—EEOC's historic interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer's likely intent."

According to the DOJ, for disparate impact claims under Title VII to avoid violating the Constitution, there are three requirements including, the business necessity defense can only require employers to show that the challenged practice is "rational, convenient, or helpful for serving a valid business purpose." Employment practices should be assumed to be job related and only "irrational or arbitrary practices with no plausible job-relatedness can create disparate impact liability." Second, plaintiffs must demonstrate that the challenged employment practice caused the disparate impact. Third, plaintiffs need to show that there is an alternative practice resulting in less disparate impact that would be equally effective for serving the employer's valid business purpose.

The DOJ acknowledges that beginning with Griggs v. Duke Power Company, the United States Supreme Court established disparate impact liability "prohibiting not only overt discrimination but also practices that are fair in form, but discriminatory in operation." In 1991, Congress amended Title VII to incorporate disparate impact liability as part of the law. The DOJ believes that "The fundamental problem is that disparate-impact liability tends to incent—and even coerce—employers to make race-based decisions to avoid liability or the threat of liability."

The DOJ found that the EEOC's rules and guidance such as its affirmative action regulations and the Uniform Guidelines on Employee Selection Procedures violate both Title VII and the Constitution. The DOJ concluded that "Because EEOC is the entity established by Congress to enforce Title VII against covered private and public employers, regulated parties must have confidence that its guidance accurately reflects the best interpretation of the law."

District Court Declares $100,000 H-1B Visa Application Fee Unlawful

The United States District Court for the District of Massachusetts ruled in the case of State of California v. Markwayne Mullin that the $100,000 H-1B visa application fee imposed by a presidential proclamation was unlawful and was vacated. The judge has temporarily paused this ruling to allow the government to appeal this ruling with the United States Court of Appeals for the First Circuit.

This case was brought by 20 states challenging the increase in the H-1B visa fee, which increased the maximum fee from $7,595 to $100,000, effective September 21, 2025. The plaintiffs contended that the increased fee would harm their respective states since it would impede their ability to hire teachers for their primary and secondary schools, negatively impact their ability to staff public colleges and universities and undertake academic research, and lead to a decline in medical workers that would exacerbate staffing shortages leading to diminished access to healthcare.

The District Court found that the increased fee amounted to a tax on those filing H-1B visa petitions, which the Immigration and Nationality Act (INA) does not authorize the president to impose. Nor could the District Court find any INA provisions delegating the power to impose a tax to federal agencies. The District Court also believed that the increased fee violated the Administrative Procedure Act (APA) since it was imposed without engaging in rulemaking that included notice and opportunity for the public to provide comments. The District Court stated that the APA required rulemaking could "have altered Defendants' decision to impose an unconstitutional tax on the H-1B program or, at the very least, required Defendants to consider the impact of the $100,000 payment obligation on regulated entities such as Plaintiffs." An earlier District Court for the District of Columbia decision in a case brought by the Chamber of Commerce upheld the increased H-1B visa.

Faster Labor Contracts Act Passes House

By a vote of 230–193, the House of Representatives passed the bipartisan Faster Labor Contracts Act (H.R. 5408), which was introduced by Representative Donald Norcross (D-NJ) and Representative Pete Strauber (R-MN). According to Representative Norcross, it takes an average of 458 days for unions and employers to agree on an initial contract. The bill is designed to speed up the first contracts for new unions. Companion legislation (S. 844) has been introduced in the Senate.

The bill would amend Section 8(d) of the National Labor Relations Act to require that employers begin negotiating with newly certified unions within 10 days of receiving a written request. If after 90 days of negotiation, no agreement is reached, either party can request mediation from the Federal Mediation and Conciliation Service (FMCS). After 30 days, if mediation does not result in an agreement, a 3-person arbitration panel would impose a binding 2-year contract. During those initial two years, both parties could agree to amend the contract.

Hearing Held on NLRB Priorities

The House Subcommittee on Health, Pensions, Education and Labor of the House Committee on Education and the Workforce held a hearing to examine the priorities and policies of the National Labor Relations Board (NLRB). James Murphy, NLRB chairman, testified his goal is "to promote a Board that works—efficiently, expeditiously, and in a way that earns the confidence of employees, employers and unions." He indicated that his top priority is reducing a case backlog pending review by NLRB members. He stated that due to a nearly one-year period when the Board lacked a quorum, the backlog increased significantly to 591 cases pending review. He reported that the backlog had been reduced to 387 cases despite the assignment of 152 new cases resulting in a net resolution of 352 cases over five months.

Crystal Carey, NLRB general counsel, testified that her chief priority "is to address the backlog and implement sustainable operational and case handling measures to ensure cases are addressed in a timely fashion going forward." She noted that despite understaffing, investigations have been completed on a total of 7,066 cases that were pending as of January 7, 2026, a nearly 40% reduction in the cases awaiting determination by a regional office. She advised that she redistributed 3,500 cases among the regional offices and encouraged regions to seek reasonable settlements of pending cases. She said that she is excited to add 100 new employees to the field offices.

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at [email protected].