That’s because when you rely on generic prompts or skills as input, the resulting output may not be protected by copyright – meaning that your competitor down the street can copy it, paste it onto their own website, and there’s very little you can do about it.

It’s issue that almost nobody in the AI-for-lawyers space is talking about.

Here’s the quick backstory.  As a general rule, only work created by humans qualify for copyright protection. So, what happens when AI is involved in creation.  The U.S. Copyright Office addressed that question in its January 2025 report on Copyright and Artificial Intelligence, and the conclusion was clear.  Prompts alone — no matter how detailed or how extensively iterated — don’t give humans enough control over the output to claim copyright. The Office treats prompts as “unprotectible ideas” or instructions.  In other words, you’re telling the AI what you want, but you’re not controlling how it expresses that idea. The AI is. 

The report didn’t specifically address skills, because skills weren’t around at that time. But the same logic would likely apply: if the skill is essentially a packaged set of instructions telling Claude “write a client newsletter in a friendly tone covering these five topics,” the output is going to face the same copyrightability problem as a detailed prompt. You bought instructions. Instructions don’t create copyright. The AI generated the expression.

That’s the risk inherent with plug-and-play skills and prompts.  But there’s also a solution if you take the time to create your own skills.  Here’s why.

The Copyright Office also explained that when a human author’s own creative expression is perceptible in the AI output, that expression is protectable. The Office registered a work called Rose Enigma where the artist had drawn an illustration by hand, fed it into an AI system, and the AI produced a modified version. Because the human’s original drawing was clearly visible in the output, the human got copyright protection for their contribution.

And therein lies the lesson.  If you build a skill that embeds your own expressive material — your template language, your firm’s voice and tone and unique turn of a phrase – and those elements carry through into the output, you have a solid basis for protecting your work. Not because you wrote a clever prompt or skill but because your own authored expression is sitting there in the generated work, perceptible and identifiable.

Most lawyers aren’t building skills this way because nobody has shown them how. They’re either writing prompts on the fly, buying packages that produce generic output, or giving up on AI for marketing content entirely.  So let me teach you how to create Claude skills the right way so that you and your team can generate content that you can protect from infringement.  Register for the AI for Lawyers Cohort launching May 1 here. 

If you missed it live, this is a chance to see how AI can support your real legal work in a practical, usable way.

👉Sign Up Here

When you sign up for the replay, you’ll also receive a exclusive discount offer for the next step:

⚖️ AI for Lawyers: A Hands-On Cohort

24 attorneys · Three Fridays in May 2-4 pm ET.   All sessions recorded

Here’s what it looks like when this clicks:

You open a matter and Claude already knows how to work it.
Your client emails go out faster—and better.
Your briefs, research, and marketing all move in your voice, without starting from scratch.

You’re not working more. You’re producing more—and better.

The Program

May 1 — Skills & Setup 🧰
Configure Claude for your actual practice. Build custom skills together and leave with a shared library created across the cohort.

May 8 — Projects & Brand Voice 📣
Structure matters as projects. Lock in your voice so your content sounds like you—not a machine.

May 15 — Automation ⚙️
Schedulers, connectors, and workflows that keep working after you log off.

What You’ll Walk Away With 👣

• Custom skills tailored to your practice
• Live projects built on real matters
• A defined brand voice for content and communication
• Automations handling repetitive tasks
• SOPs you can reuse, delegate, and scale
• A network of attorneys working alongside you

This Is For You If

You do serious legal work and want AI to make it faster and better—not just cheaper—and you’re willing to build something usable over three focused sessions.

This is not a passive training or a one-off demo. It’s working sessions where you leave with systems in place.

And yet, when it came time to file a brief supporting the executive order retaliating against lawyers, you were too afraid to sign your own name.

That’s exactly what happened last Friday. Bloomberg reports that the firms and in-house counsel who filed amicus briefs asking the D.C. Circuit to affirm the lower court rulings invalidating retaliatory executive orders against fourl bigaw firms did so anonymously. Let that sink in for a moment. These are supposed to be the heavyweights of the legal profession, who have the biggest platforms, the deepest pockets, and the most job security. And they couldn’t muster the courage to put their names on a public court filing.

Now contrast that with our solos and smalls. We’re built different.  Eight hundred and thirteen solo and small firm lawyers proudly signed their names to this amicus brief we filed opposing the executive orders. No anonymity. No hiding. Just lawyers standing up and saying, “This is what I believe.”

The money and prestige of high-level legal positions are enviable, but they come at a cost. The freedom to sign your name whenever you want? That’s priceless.

Abstract: Management service organizations (MSOs) — private-equity-backed companies that buy a law firm’s operational infrastructure and manage it back under long-term contract — are being pitched as a novel workaround to the prohibition on nonlawyer ownership of law firms. They’re not. The legal profession has already experimented with MSO-like dual-entity structures, from the benign failures of Clearspire and Atrium to the devastating foreclosure mills of the 2000s, where the separation of business operations from legal practice led to robo-signed documents, fabricated affidavits, and mass harm to homeowners. Today, only one ethics opinion — Texas Ethics Opinion 706 — directly addresses MSOs, and it leaves critical questions about long-term governance unanswered. This article examines how MSOs operate, how they differ from PEOs and other outsourcing arrangements solos already use, what the ethics rules actually say, and why solos and small firms may be better served by the alternatives that have always been available to them.

For a profession powered by precedent, lawyers have remarkably short memories when it comes to the past. Today, managed service organizations (MSOs) — private-equity-backed companies that purchase a law firm’s entire operational infrastructure and then manage it under long-term contract — are regarded as some new kind of end run around the prohibition on outside law firm ownership. But the reality is that legal has already experimented with MSO-type arrangements in the past with disappointing and in the case of foreclosure mills, devastating results.  

Still, MSO deals are gaining traction in the legal market and it’s only a matter of time before these models reach solos and small firms. So it’s worth understanding now what these arrangements actually involve, and whether the alternatives to outside ownership and exit strategy that have always been available might get you where you want to go without taking the profession down with you

So let’s take a step back and look at how an MSO actually operates. A private-equity-backed company acquires all of a law firm’s non-legal operations — technology, HR, payroll, marketing, facilities, client intake, data infrastructure — and then manages those functions back to the firm under a long-term management services agreement.  The  lawyers keep practicing law and the MSO runs everything else. 

But an MSO differs from a passive vendor like a professional employer organization (PEO) that manages HR or an IT company that operates your tech.  MSOs are intricately involved with day to day operations that can impact clients – like client-intake or imposing timelines for resolving litigation.  And because law firm owners often own a piece of the MSO which is the asset with the real resale value, there’s an incentive to follow the MSO’s strategy at potential detriment to law firm clients.  As one recent article by Lev Bryedo describes it, “the MSO hires the practice’s office manager, then its billing staff, then its scheduling coordinator, then implements intake systems that channel patients based on revenue optimization. Each individual step may be defensible as a business function. Cumulatively, they can transform the MSO from a service provider into a de facto practice manager.” And because law firm owners often own a piece of the MSO — which is the asset with the real resale value — there’s an incentive to follow the MSO’s strategy at potential detriment to law firm clients. 

The legal profession has already dealt with MSO-like structures.  As Bob Ambrogi reported several years back, some have been benign failures — ambitious experiments that simply didn’t work out.  For example, a venture called Clearspire launched in 2010 with the idea of splitting a law practice into two entities: one to practice law, the other to handle technology and operations. It shut down four years later. Then in 2017, Justin Kan, who’d previously sold Twitch to Amazon for $970 million,  launched Atrium with $75 million in venture capital and the same basic concept: a law firm on one side, a technology services company called Atrium LTS on the other, handling all operations, marketing, and workflow software. By January 2020, most of the lawyers had been let go. In both cases, no clients suffered. These were just business models that couldn’t sustain themselves. 

But other experiments with this kind of structure had far worse consequences.  During the foreclosure crisis, high-volume mills like David Stern’s in Florida and Steven Baum’s in New York sold their document processing and operational infrastructure to outside entities while the lawyers kept their licenses and stayed on as clients of the very companies they’d sold to.  Once the business side was running the show, pressure to increase case volume and profit led to robo-signed documents, fabricated affidavits, and impossible caseloads that burned through lawyers and left thousands homeless.   The scandal could have continued for years were it not for  heroic solo and small firm lawyerswho stumbled across the massive abuses while doing their job of representing their clients.

Some chalk up the foreclosure crisis example to bad actors. Not so.  It’s the unavoidable by-product of pressure to generate returns combined with technology built for efficiency.  AI raises the stakes.  

As I said earlier, right now high-profit operations like big PI and mass torts hold the most appeal for MSOs. But they may soon move down the food chain and consider a grab for solo and small firm markets. And if they do, solos and small firms need to understand the ethics landscape.

To date, only Texas Ethics Opinion 706 (February 2025) directly addresses MSOs by name It draws two bright lines. First, the opinion holds that paying an MSO a percentage of your firm’s revenues constitutes impermissible fee-splitting with a nonlawyer. The fee has to be flat, cost-plus, or otherwise untethered from what you earn from clients. Second, lawyers can own equity in an MSO – but only if the MSO doesn’t practice law, the investment doesn’t impair professional judgment, and any referrals between the firm and the MSO comply with conflict-of-interest rules. 

For everything else, we’re working from analogy. As this Holland & Knight post summarizes, state bars have been approving PEO arrangements for decades — New Hampshire in 1989, Michigan, North Carolina, Connecticut, Texas, Colorado, Ohio, New York, all following with essentially the same conditions: the law firm stays in control, no fee-splitting, protect client confidences, supervise nonlawyer staff. DC Bar Ethics Opinion 304 is a good example. It approved a firm outsourcing all its HR functions to an employee management company but only because the firm retained “full management and supervisory authority” and the management company had “no say in directing lawyers or legal assistants what duties to perform.” That’s a PEO staying in its lane. By contrast, an MSO that controls your intake, your case processing times, your technology, your marketing, and your staffing is a fundamentally different animal that no regulators have approved to date..

            To be honest, I’m not opposed to non-lawyer ownership of law firms. Arizona ripped off the band-aid by abolishing its version of Model Rule 5.4, with mixed results for consumers.  At least it’s clear to consumers where a law firm stands. it’s either owned by lawyers or it’s not.  MSOs are too clever by half: they incubate a blurred netherland, allowing a firm to hold itself out as owned by attorneys when VC is calling the shots.  

            What’s more, it’s not clear that MSOs offer solos and small firms much they can’t already get on their own. Many of the operational services an MSO would provide — technology, billing, marketing, intake systems — can now be handled in-house with AI tools and off-the-shelf software at a fraction of the cost and with none of the strings. And if the appeal of an MSO is really about an exit strategy, a solo or small firm would be better off building up the practice for an outright sale than handing over its operational infrastructure at a discount under a long-term management services agreement.

Biodiversity degradation is an existential crisis affecting planetary and human health, but the 1973 Endangered Species Act, as it has been administered, falls short. It is widely accepted that in the five decades the law has been in effect, populations of mammals, birds, amphibians, and fish have dropped a shocking 68 percent.

For those engaged in business in which real estate is an asset, last week’s announcement of four proposed ESA rules is more than administrative housekeeping. It represents a meaningful turn toward restoring the predictability, efficacy, and statutory fidelity that the regulated community relies on to make informed decisions about land and capital under a federal law up to the challenge.

The proposals would roll back Biden era ESA regulations, widely criticized for expanding federal reach, creating unnecessary complexity, and drifting away from the statute’s text, all despite more than five decades of ESA implementation history. These new rules implement Executive Orders 14154 (“Unleashing American Energy”) and 14219 (“Department of Government Efficiency”), as well as Secretary’s Order 3418, which collectively direct agencies to remove regulatory barriers that impede responsible resource development and economic growth while maintaining the conservation mission Congress intended.

As Secretary of the Interior Doug Burgum put it, the administration is “restoring the Endangered Species Act to its original intent, protecting species through clear, consistent and lawful standards that also respect the livelihoods of Americans who depend on our land and resources.”

What the Four Proposed Rules Would Do

1. Listing and Critical Habitat (50 CFR part 424)
This rule would return the listing process to the 2019 regulatory text. Most significantly, it would once again allow transparent consideration of economic impact information that does not dictate the listing decision but helps the public understand its implications. It also restores clarity to the “foreseeable future” standard and reinstates the longstanding two-step analysis for designating unoccupied habitat. For developers of real estate projects managing timelines and financing, a return to well understood definitions is not trivial.

2. Interagency Cooperation (50 CFR part 402)
Section 7 consultation has long been the chokepoint where project timelines can stall. The agencies propose to restore the 2019 definitions of “effects of the action” and “environmental baseline,” removing the 2024 “offset” provisions that never fit comfortably within the statute. These revisions directly respond to the Supreme Court’s landmark Loper Bright decision, which ended Chevron deference and reinforced that agencies must adhere to the ESA as written. Clarity in consultation is clarity in project management.

3. Threatened Species Protections (section 4(d))
FWS proposes to eliminate the “blanket 4(d) rule,” replacing it with species specific rules for threatened species. This aligns FWS with NMFS’s longstanding approach and reflects the best reading of the statute under Loper Bright. Importantly for real estate interests, this ensures that restrictions are narrowly tailored, avoiding one size fits all prohibitions that needlessly burden otherwise routine activities.

4. Critical Habitat Exclusions (section 4(b)(2))
Finally, FWS proposes to reinstate its 2020 critical habitat exclusion rule governing how economic, national security, and other impacts are considered when evaluating whether to exclude areas from critical habitat. This process had been disrupted by the 2024 rules. The reinstated framework promises transparency and predictability while retaining the agency’s authority to protect species from extinction.

Director Brian Nesvik of FWS emphasized that these actions “restore clarity and predictability” and keep the focus on “recovery outcomes, not paperwork.” That message resonates strongly across industries that depend on stable regulatory expectations.

What These Changes Mean on the Ground

While none of these rules individually upends the ESA landscape, their collective impact is significant. Pending lawsuits challenging the 2024 regulations may become moot or need to be amended, and new challenges are likely. Of particular note: these proposed rules do not address the Service’s recent proposal to rescind the ESA’s definition of “harm,” a high stakes issue to watch closely.

Because all four proposed rules are prospective, current ESA determinations remain valid. Existing consultations, biological opinions, and critical habitat designations continue to control ongoing operations. But regulated entities should anticipate that threatened species protections may shift once species specific 4(d) rules come online, and consultation procedures for new projects will almost certainly change.

In short, the rules promise more clarity, but also more change, both of which will better respond to biodiversity degradation.

Of note, these changes will not impact state laws, like the Maryland Nongame and Endangered Species Act where the state has its own list of protected species not on the federal list, including legislatively (i.e., not through any scientific or data driven process) protecting species not federally listed, like the eastern small footed bat (after the U.S. Fish and Wildlife Service “found that listing was not warranted” because the culprit in its decline was not humans but a fungus), further expanding the state’s regulatory reach and imposing significant economic burdens on landowners in the State with no real benefit to planetary or human health.

A Look Back and Forward

Veterans of ESA practice may recall that the first federal endangered species list included a handful of charismatic megafauna, including the grizzly bear. The ESA’s scope has since expanded dramatically, even as biodiversity loss accelerates. Critics argue the statute has failed to meet the scale of today’s ecological challenges. Supporters emphasize that the law remains one of the strongest conservation tools ever enacted.

Regardless, the regulated community functions best under clear, consistent rules. These proposals aim to deliver just that.

The agencies are accepting comments through December 21, 2025. Stakeholders in real estate, construction, infrastructure, and energy development would be wise to weigh in. When it comes to ESA regulation, clarity is not merely good governance; it is a competitive advantage that is also good for biodiversity degradation.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Mandatory GHG Disclosures in Real Estate Contracts” on Tues, Dec 16 at 9 am. The webinar is complimentary, but you must register here

At the same time, technology and AI are beginning to transform what compliance looks like. Our firm has been developing an AI-powered compliance platform designed specifically for California wage-and-hour rules, and early feedback from the first companies using it has been extremely positive. More on that below.

For now, here are the five compliance priorities every employer should be focused on as we head into the new year:

1. PAGA Reform Only Helps Employers Who Can Prove Compliance

The 2024 PAGA reform allows employers to dramatically reduce potential penalties—down to 15% of what plaintiffs could otherwise seek. But this benefit is not automatic.

To qualify, employers must show they took meaningful “reasonable steps,” including:

• Regular payroll and timekeeping audits
• Updated policies and employee handbooks
• Supervisor training
• Prompt corrective action

Documentation is now everything.
If it’s not documented, it didn’t happen.

2. PAGA Filings Are Still at Record Levels

Many assumed PAGA lawsuits would drop after the reform. They didn’t.

In fact:

• 2024 saw the highest number of PAGA filings in history
• 2025 is tracking at nearly identical levels
• A handful of plaintiff firms now file over 25% of all PAGA cases statewide

High-volume plaintiff firms are moving quickly, and state enforcement remains aggressive.
Reform changed the rules—but it did not reduce the risk.

3. Routine Payroll & Timekeeping Audits Are Your Strongest Protection

Meal and rest periods, accurate timekeeping, paystub formatting, overtime calculations, split-shift rules, and off-the-clock issues continue to drive the majority of wage-and-hour claims.

The best defense entering 2026 is a recurring audit process, ideally quarterly. These audits should review:

• Meal and rest break compliance
• Paystub formatting (Labor Code § 226)
• Overtime and double-time calculations
• Local and state minimum wage updates
• Timecard edits, patterns, and approvals

When a PAGA notice arrives proving compliance will be critical.

If you don’t have that documentation, you lose access to the 15% penalty cap.

We’ve created a simple model employers can use to set up their own audit process—a 5-step, 30-minute payroll audit. Download it here.

4. Supervisor Training Is Now Essential—Not Optional

To qualify for reduced PAGA penalties, employers must show that supervisors were trained on wage-and-hour compliance.

Effective training must cover:

• Scheduling legally compliant meal and rest periods
• How to handle late, short, or missed breaks
• Preventing off-the-clock work
• Overtime rules
• Documentation and communication requirements

Employers should maintain records of:

• Attendance
• Training length
• Topics covered
• Learning management system completions or signed acknowledgments

A well-trained supervisor can prevent more violations than any policy manual.

5. AI Will Transform Compliance in 2026—and We’re Building the Tools

One of the most important developments heading into 2026 is the arrival of AI-driven wage-and-hour compliance software.

Our firm has partnered with a developer to build a platform specifically for California employers that can:

• Analyze thousands of time records in minutes
• Detect missed, short, or late breaks
• Identify missing premiums
• Flag potential violations or patterns
• Run automated payroll audits
• Produce summaries employers can use as evidence of “reasonable steps”

Several employers are already using early versions of the software, and the feedback has been extremely encouraging. Many report that it provides compliance visibility they could never realistically achieve on their own.

If you’d like to join the waitlist for early access, sign up here.

Final Thoughts for 2026

California’s regulatory environment isn’t getting simpler—but employers have more tools than ever to protect themselves. Heading into 2026, success depends on:

• Staying current on wage-and-hour requirements
• Building consistent systems—not one-off fixes
• Documenting every compliance effort
• Training supervisors thoroughly
• Leveraging technology and AI to stay ahead of violations

If you’d like help conducting a privileged wage-and-hour audit, strengthening your compliance systems, or training your managers before the new year, my team and I are here to support you.

Many employees say AI improves efficiency, idea generation, and work quality. McKinsey & Company+1

But this increased adoption comes with risks. Independent surveys of workers show many admit to inappropriate AI use, including uploading sensitive company data to public AI tools, using AI when it is not allowed, or failing to check the accuracy of AI-generated work. Fast Company+1

Why Banning AI Use Is a Bad Idea

With so many employees already using AI on their phones or home computers, a blanket ban is unlikely to work. Banning AI tends to drive use underground. That hiding can erode trust, lead to undisclosed mistakes, and harm company culture.

Even with a ban, the risks remain: Privacy breaches, improper use, and unrecorded AI-assisted work. Banning only reduces transparency.

A Better Approach: Train Your Workforce

Many of the problems associated with AI use stem from lack of understanding. The better path is to treat AI as a workplace tool and teach employees how to use it responsibly:

• Train them on how AI works, including its limitations.
  
• Emphasize verification: AI-generated content must be checked before use.
  
• Teach confidentiality and data-handling best practices.
  
• Provide examples of acceptable vs prohibited use.
  

Several workforce-AI studies highlight that adoption of AI tools tends to be far safer and more effective when paired with training, guidance, and human oversight. McKinsey & Company+1

If internal resources are limited, employers can rely on external training programs or vendor-provided onboarding.

Why You Need a Clear AI Policy

A thoughtful AI policy should cover:

• Confidentiality and data protection.
  
• Disclosure requirements for AI-generated work.
  
• Verification of AI outputs.
  
• Human accountability (final decisions remain with people.)
  
• Intellectual property and attribution guidelines.
  
• Prohibitions against certain risky AI uses (e.g. replicating someone else’s likeness or voice).
  
• Clear consequences and reporting mechanisms.
  

There is no universal AI policy template. What works for one organisation may not suit another.

Encourage Ongoing Learning and Upskilling

Technology evolves quickly. Many experts find that a worker’s “skills half-life” is shrinking; what they know today may need a refresh in just a few years.

Employers should consider offering regular AI training sessions, time for self-directed learning, or even modest budgets for continuous education. Investing in people ensures that AI remains a tool, not a risk.

Final Takeaway

AI is already transforming workplaces. A ban may seem like an easy fix, but it rarely works in practice. A better strategy is to build trust, offer training, set clear policies, and encourage responsible use.

With the right approach, AI can boost productivity, support innovation, and help employees do better work, without compromising compliance or trust.

If your organisation needs help developing an AI use policy or staff training, feel free to reach out to our team for support.

Expanding Greenwashing Litigation Landscape

At the same time, the cast of plaintiffs bringing these matters has widened, joined by increasingly sophisticated allegations. Shifting government enforcement priorities have only emboldened activists and private consumers to make claims and initiate litigation.

Greenwashing is no longer a theoretical compliance concern. It is a real and material area of risk for which there is little insurance, which American businesses, including sectors once assumed to be peripheral to environmental claims. The food production sector is one such example.

High-Profile Settlements: Tyson Foods and JBS USA

Two of the largest players in U.S. beef production, Tyson Foods and JBS USA, recently entered into high-profile settlements over alleged greenwashing. Together, these companies produce more than 50% of the beef consumed in the United States. Their settlements are a cautionary tale for every business making environmental assertions about products or operations. If they can come after the cows (.. cows belch methane, but evidently it is not an anthropogenic thing), your business could be next with a bullseye on its back.

Tyson Foods resolved litigation brought by the Environmental Working Group in a settlement agreement, agreeing to cease claiming that it aims to achieve “net zero” emissions by 2050. Tyson also decided to halt allegedly misleading marketing for its Brazen Beef line. Although the company cited a 10% reduction in greenhouse gas emissions during production relative to conventional beef, the 2024 lawsuit argued Tyson conveyed a misleading impression that its broader portfolio was “climate smart,” and most aggressively in what some have characterized as weaponizing environmental protection, that Tyson lacked a rigorous enough plan that could achieve its net zero goals, that was the reason the company was forced into a settlement. In a year when Tyson lost more than $460 million on its beef business and closed its Lexington, Nebraska, plant, one of its four major beef processing plants, in part in response to “legal settlements.”

JBS USA faced similar claims. The New York Attorney General filed complaint incredibly avers, “Even if it had developed a plan to be ‘Net Zero by 2040,’ the JBS Group could not feasibly meet its pledge because there are no proven agricultural practices to reduce its greenhouse gas emissions to net zero at the JBS Group’s current scale, and offsetting those emissions would be a costly undertaking of an unprecedented degree.” Many criticized this case as not based in science but a political attack, as we blogged in New York is Coming for Your Cheeseburger with Greenwashing Case. This case concluded with JBS entering into an Assurance of Discontinuance and agreeing to pay $1.1 million to settle allegations that it misled the public about its climate commitments.

Navigating Compliance and Mitigating Risk

While lacking full statistical rigor, we have seen a surge at our law firm in inquiries seeking counsel in defending greenwashing allegations. We have posted more than a dozen blogs on the subject, including recently, Reverse Greenwashing: The Battle Over ExxonMobil’s Recycling, and Greenwashing? Court Says Coca-Cola’s Aspirational Statements May Mislead Consumers.  

Just last week, the US Supreme Court let stand a Ninth Circuit Court of Appeals ruling that Amazon is not liable for third party greenwashing claims, upholding its protection under Section 230 of the Communications Decency Act. The case was brought by Planet Green Cartridges, a printer cartridge recycler, which alleged that Amazon profited from other sellers falsely advertising their products as recycled.

So where should a business begin?

While nearly a dinosaur in regulatory terms, the best foundation remains the Federal Trade Commission’s “Green Guides,” found at 16 C.F.R. § 260. These Guides represent the FTC’s current views on environmental claims, even if “current” is a bit generous, with the last update in 1998. Still, they offer practical examples of what the FTC considers impermissible or misleading environmental marketing. The existing Guides remain the most authoritative baseline for evaluating environmental claims.

Key Takeaways for Businesses

The lesson from 2025 is unmistakable: environmental statements must be precise, substantiated, and contextualized. Truth is not an absolute defense. Aspirational statements about future climate goals are no longer immune from challenge. Claims about renewable energy, carbon, climate, sustainability, recyclability, or renewable content must be anchored in verifiable, defensible evidence.

As greenwashing litigation continues to evolve and expand, companies must remain vigilant. By consulting knowledgeable counsel at the outset, before a product launch, a website refresh, or an annual report, companies can safeguard their reputation, avoid costly disputes, and help foster a marketplace where environmental claims are to be believed. If environmental zealots can come for the cows, they are similarly capable of targeting your business.

_________________________

Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Mandatory GHG Disclosures in Real Estate Contracts” on Tues, Dec 16 at 9 am. The webinar is complimentary, but you must register here.

1. Holiday Time Off Is Not Required Under California Law

California employers are not legally required to give employees time off for holidays, unless the request relates to a sincerely held religious belief (covered below). As the DLSE explains:

“Hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week. California law does not require employers to provide paid holidays, close their business on holidays, or give employees time off for specific holidays.”

That said, consistent application of company policies is essential, especially in 24/7 operations like restaurants, hospitality, and healthcare.

2. No Requirement for Paid Holidays or Premium Pay for Holiday Work

Employers do not need to pay employees for holidays they do not work, nor is extra pay required for hours worked on a holiday. While employers may voluntarily offer “holiday pay” or premium pay, these benefits must be clearly defined in handbooks or written policies.

Legislative attempts such as the “Double Pay on the Holiday Act of 2016” have occasionally surfaced, but none have passed. Still, given California’s active legislative climate, employers should monitor for future proposals impacting holiday pay.

3. Religious Holiday Observances Require Reasonable Accommodation

Employers must provide reasonable accommodations to employees who cannot work on certain holidays due to religious observances. This may include schedule adjustments, shift swaps, or allowing use of accrued time off. As with all accommodation issues, the analysis is fact-specific and requires an individualized assessment.

For industries that regularly operate on holidays—restaurants, retail, hospitality—employers should clearly communicate scheduling expectations in advance and ensure managers understand the accommodation process.

4. Paid Holiday Benefits Do Not Accrue Like Vacation

If an employer offers paid holidays, employees do not accrue this benefit like vacation, and unused holiday pay does not need to be paid out at separation. Employers should be explicit that holiday pay is contingent on being employed on the holiday itself.

Many employers also implement eligibility rules—such as requiring employees to work their scheduled shift immediately before and after the holiday. These rules must be applied consistently and should be clearly stated to avoid claims of unfair treatment.

5. Payroll Timing May Shift When Holidays Fall on Payday

If a holiday falls on a regular payday and the business is closed, the employer may process wages on the next business day. Employers should confirm that payroll schedules comply with the DLSE’s requirements and review the list of holidays recognized under California Government Code Section 6700, including:

• New Year’s Day
• Martin Luther King Jr. Day
• Memorial Day
• Independence Day
• Veterans Day
• Christmas Day

Additional holidays—such as Admission Day (September 9) and Native American Day (fourth Friday in September)—are also included in the Code.

Employers should review their payroll vendor’s holiday schedule now to avoid surprises and ensure timely, compliant wage payments.

Wishing you a productive and successful holiday season! With clear policies and proactive communication, employers can reduce risk, maintain compliance, and support employees during one of the busiest times of the year.