On July 1, 2025, the California Civil Rights Department (CRD) released a new employee rights notice and a Frequently Asked Questions (FAQ) document in connection with Assembly Bill 2499 (AB 2499), a victims’ leave law enacted in 2024.

The U.S. Department of Labor (“DOL”) has announced a major change in how it enforces federal wage and hour laws. As of June 27, the DOL’s Wage and Hour Division (“WHD”) will no longer demand liquidated damages—an additional amount equal to back wages owed—when resolving investigations before litigation. This reverses a long-standing policy that had required employers to pay both back wages and liquidated damages to settle claims, even outside of court. The new guidance (Field Assistance Bulletin 2025-3) clarifies that the Fair Labor Standards Act (“FLSA”) only authorizes liquidated damages as a remedy in lawsuits—not during administrative investigations.

The Court has issued a number of controversial and impactful decisions this term. We review a few of the decisions that will likely be most impactful for employers. If any employers require experienced guidance regarding these or any other employment issues, contact the legal team at MNK Law, at info@mnklawyers.com, or 562.362.6437.

A newly filed class action lawsuit in California is raising the stakes for businesses that use artificial intelligence to monitor or analyze customer service calls. The plaintiff in Galanter v. Cresta Intelligence alleges that the AI vendor captured, transcribed, and analyzed her call without sufficient notice or consent, violating California’s strict privacy laws. Importantly, the case targets not only the recording of the call itself, but also the vendor’s potential to use the data for training AI models and product development—highlighting a broader legal theory that AI capabilities alone may constitute a violation.

Supreme Court’s Ames Decision Levels the Playing Field in Discrimination Lawsuits. In a unanimous June 2025 decision, the U.S. Supreme Court ruled that employees from majority groups—such as white, male, or heterosexual employees—do not need to meet any extra requirements when bringing a discrimination claim under Title VII. Previously, courts in several regions required these plaintiffs to show “background circumstances” suggesting their employer was unusual enough to discriminate against the majority. That rule no longer applies. Now, all employees, regardless of background, are subject to the same legal test when claiming discrimination.

A recent poll of employers has revealed some of the topics on the forefront of their minds in 2025. Norton Rose Fulbright has polled employers in its 2025 Litigation Trends Survey. We highlight below some of the trends showing the greatest growth in risk.

Recent riots in Los Angeles, sparked by public outrage over U.S. Immigration and Customs Enforcement (ICE) operations, have caused widespread disruption across several commercial districts. What began as peaceful protests quickly escalated into violent clashes, resulting in vandalized storefronts, looted shops, and damaged public property. The unrest has prompted growing concerns about the stability of the city’s business environment, particularly in immigrant-heavy neighborhoods.

A federal judge has formally approved a landmark $2.8 billion settlement in House v. NCAA, clearing the way for colleges to begin directly paying student athletes. The ruling ends years of legal challenges alleging that the NCAA illegally restricted the earning potential of college athletes. Beginning July 1st, Division I schools will be able to compensate athletes directly—up to an initial cap of approximately $20.5 million per year, in addition to scholarships and other benefits. The NCAA will also pay out billions in back damages to athletes who competed from 2016 onward.

The legal landscape for cannabis use in California has shifted dramatically in recent years. Employers have traditionally retained broad authority to discipline or terminate employees who test positive for marijuana—even if used lawfully off the job, however, that changed with the passage of Assembly Bill 2188 (AB 2188), and Senate Bill 700 (SB 700). Together, these laws limit how employers may use cannabis-related information in hiring and disciplinary decisions, signaling a major policy shift in favor of employee protections.