Each month, CUPA-HR General Counsel Ira Shepard provides an overview of several labor and employment law cases and regulatory actions with implications for the higher ed workplace. Here’s the latest from Ira.
NCAA Proposes Settlement of Class Action Student-Athlete Lawsuit Alleging It Violated Antitrust Laws
The NCAA has proposed a settlement to an individual and class action lawsuit brought by a University of North Carolina tennis player who was forced by NCAA rules to forfeit prize money she earned at the U.S. Open tennis championship before enrolling in the college and participating in the college tennis program (Brantmeier v. NCAA (M.D.N.C. No. 1:24-cv-00258, 4/28/26)).
The NCAA has agreed to pay $2 million in damages and rescind the rule as it applies to student-athletes before they enroll in college. The rule would still restrict student-athletes from receiving prize money from third parties running non-NCAA sports events while the student-athlete is competing in NCAA sports.
IBM Settles DOJ Claim That It Falsified Its Federal Contractor Certification in Using DEI Criteria in Hiring, Compensation and Promotion Decisions
The Department of Justice (DOJ) announced that it has reached a $17 million settlement with IBM over allegations that the company falsified its federal contractor certification in making hiring, promotion and compensation decisions. The DOJ alleged that IBM took race, color, national origin or sex into account when making employment decisions in violation of applicable civil rights laws and in violation of its federal contractor certification that it was not using DEI guidelines in making employment decisions.
The DOJ had alleged that IBM had developed race and sex demographic goals for business units when making employment decisions. In reaching the settlement, the DOJ acknowledged that the company had cooperated with the government in its investigation.
University Wins Temporary Stay in Enforcement of EEOC Subpoena Requiring Contact Information of Jewish Employees
The University of Pennsylvania won a temporary stay in enforcement of an Equal Employment Opportunity Commission (EEOC) subpoena requiring disclosure of contact information of all employees affiliated with Jewish groups and working in the university’s Jewish Studies Program as part of the EEOC’s investigation of the university, while the university appeals the judge’s order affirming the subpoena at the 3rd U.S. Circuit Court of Appeals (EEOC v. Trustees of the University of Pennsylvania (E.D. Pa. 2:25-cv-0652, 4/27/26 Stay Issued)).
Some student and faculty groups joined the university’s request for a stay, citing associational and privacy rights of the employees affected by the subpoena. The judge who granted the stay held that while the chances of success on the appeal are not great, the university appropriately raised the issue of possible irreparable harm if the subpoena is enforced and then denied on appeal. In addition, the judge held that the stay will not substantially harm the EEOC.
Labor Department Proposes a New Joint Employer Rule Regarding Joint Employer Liability for FLSA and Other DOL-Enforced Employment Laws
The Trump administration proposed a new joint employer rule which will govern enforcement of the minimum wage, overtime and other laws enforced by the Department of Labor, replacing the rule adopted by the Biden administration. For details, see our latest public policy news update on this topic.
Class Action Challenging Employer’s Monthly $75 Smokers Charge for Healthcare Coverage Filed in Federal Court
A former Nestlé USA employee has sued the company in federal district court in a proposed class action challenging the company’s practice of charging an extra $75 per month for healthcare coverage of smokers (Hohl v. Nestlé USA Inc. (E.D. Va. No. 1:26-cv-00947, Comp, 4/7/26)).
The suit alleges that the company failed to reimburse employees who completed a smoking cessation program and that the company failed to publicize that it will take into account a statement from the employee’s doctor before assessing the penalty. Federal law allows employers to assess penalties on smokers in these circumstances if certain conditions are met. Federal courts have reached different conclusions on more than 60 cases recently filed in federal court, alleging employers have violated the rules concerning tobacco-use penalties.
Because of the unprecedented and fast-changing pronouncements of the new presidential administration and the intervening court challenges, the developments contained in this blog post are subject to change. Before acting on the legal issues discussed here, please consult your college or university counsel and, as always, act with caution.