Compliance Round Up – DOL Rolls Back the Fiduciary Rule, States Target Noncompetes, and NLRB Resets Handbook Enforcement (March 2026)

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Written By
Jennifer Kiesewetter
Published On: March 23, 2026

Jenny Kiesewetter is a practicing ERISA and employee benefits attorney who partners with HR teams on a wide range of workplace compliance matters — from benefit-plan obligations to day-to-day HR policies and regulatory requirements. Her guidance helps employers spot risks early, navigate regulatory change, and make informed decisions that support both employees and the organization.

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March didn’t bring sweeping new rules — it brought reversals and course corrections. The Department of Labor pulled back the 2024 fiduciary rule and returned to the long-standing ERISA standard for investment advice. At the same time, the NLRB’s new general counsel signaled a shift away from aggressive handbook enforcement.

While that’s happening at the federal level, states are moving in the opposite direction. Washington is close to a full noncompete ban. Virginia is tying enforceability to severance in layoff situations. And the Third Circuit lowered the bar for reverse discrimination claims under New Jersey law.

For HR teams, this isn’t a one-lane road. Federal changes may give you some breathing room to revisit policies shaped by earlier enforcement pressure. At the same time, states are moving quickly and layering on new requirements — often faster than federal law evolves.

HR doesn’t get to pick one lane here. Federal changes may loosen things up, but states are still adding new rules — and they’re moving faster.

Federal News

Effective Date: March 20, 2026

What’s Changing:

On March 20, 2026, the Department of Labor (DOL) published a final rule formally removing the 2024 “Retirement Security Rule” from the Code of Federal Regulations and restoring five-part test for determining when a financial professional qualifies as an investment advice fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA). The Biden-era rule would have significantly expanded fiduciary status — requiring a broader range of advisers and rollover recommendations to comply with ERISA’s fiduciary standards. Courts in both the Northern District and Eastern District of Texas already vacated the rule, and the DOL’s final action makes that reversal official.

Under the restored five-part test, a person qualifies as an investment advice fiduciary only when providing individualized recommendations on a regular basis, under a mutual understanding that the advice will serve as a primary basis for investment decisions. One-time recommendations — including advice to roll over a 401(k) balance into an IRA — often fall outside fiduciary status under this standard.

What This Means for HR:

Review how you classify your plan advisers. The return to the five-part test narrows who qualifies as a fiduciary and changes how you should evaluate fees, relationships, and oversight. Confirm your agreements and investment committee processes reflect the current standard.

Effective Date: February 27, 2026

What’s Changing?

On February 27, 2026, NLRB General Counsel Crystal S. Carey issued Memorandum GC 26-03 and reset how regional offices handle handbook cases. Investigators now focus on whether a rule actually interferes with employees’ rights under the National Labor Relations Act, rather than on how the policy reads on its face.

That shift changes how these cases move. When a rule does not affect employees in practice, investigators move cases toward faster resolution, often through fixes or settlements rather than extended litigation. The memo also limits how far these investigations go. If a charge focuses on one rule, investigators should stick to that rule, not your entire handbook. It also reins in the remedies. You should not see notice readings, apology letters, or nationwide postings in most routine cases.

What This Means for HR:

The rules did not change. Employers still need to avoid policies that interfere with core rights, including discussions about pay and working conditions.

What changed is the process. Routine handbook issues should move faster and involve less back-and-forth.

Take another look at your policies. If you revised them during the more aggressive enforcement period, now is a good time to revisit them.

Effective Date: March 20, 2026 (framework release; no immediate legal effect)

What’s Changing?

On March 20, 2026, the White House released an AI policy framework outlining how the administration plans to regulate AI. It pushes for federal preemption of state laws and relies on existing agencies to issue guidance.

It does not change anything today. But it points to where regulation may head.

States are not waiting. California, Colorado, Illinois, and New York City already regulate how employers use AI in hiring and other employment decisions. Those rules still apply. Even if Congress acts later, employers need to comply with what is in place now.

What This Means for HR:

State AI laws still apply. Employers using AI in hiring, promotions, performance, or workforce decisions need to understand how those tools work and what controls they have in place.

This is not the area to guess. Know what your systems do, what testing you have done, and how you monitor outcomes.

If federal rules come later, employers who already have a handle on their AI use will be better positioned to adjust.

Trending State News

Effective Date: July 1, 2026 (pending Governor’s signature)

What’s Changing: 

Virginia Senate Bill 170, passed by the General Assembly on March 4, 2026, adds a new condition to the enforceability of noncompetes in the state. Under SB 170, employers cannot enforce a noncompete agreement against an employee who is terminated without cause unless the employer also provides severance pay or other monetary compensation. The restriction applies to employees at all compensation levels, going further than prior Virginia law, which focused primarily on lower-wage workers.

If Governor Abigail Spanberger signs the bill, SB 170 takes effect July 1, 2026, and applies to any contract entered into, amended, or renewed on or after that date. Employees subject to an unlawfully enforced noncompete may seek injunctive relief, liquidated damages, lost compensation, and attorneys’ fees.

What This Means for HR:

Virginia employers should review existing noncompete agreements and evaluate how they interact with current severance practices before the effective date. An employer that terminates an employee without cause and without severance, then attempts to enforce a noncompete, creates meaningful legal risk. HR should loop in legal counsel before enforcing noncompetes against involuntarily terminated employees, and should consider whether severance programs need to be updated to preserve the ability to enforce restrictive covenants when business interests require it.

Effective Date: June 30, 2027 (pending Governor’s signature)

What’s Changing?

On March 9, 2026, the Washington State House of Representatives concurred with the Senate’s amendments to Substitute House Bill 1155, sending the legislation to Governor Bob Ferguson for signature. If signed, SHB 1155 would make Washington one of the few states to fully ban employment-based noncompete agreements, voiding all such agreements regardless of when they were entered into, effective June 30, 2027.

By October 1, 2027, employers would need to provide written notice to current and former employees that their noncompetition covenants are void and unenforceable. The bill still permits narrowly drafted nonsolicitation agreements, confidentiality agreements, and covenants protecting trade secrets. Nonsolicitation agreements must be limited to 18 months and apply only to former employees who had established direct relationships with the relevant customers or clients.

What This Means for HR:

Washington employers should begin a compliance review now, even with more than a year before the effective date. Start by identifying all active noncompete agreements covering Washington-based employees and contractors, and begin planning how to replace them with properly scoped nonsolicitation and confidentiality agreements. Multistate employers should also monitor developments in other states: California, Minnesota, Oklahoma, and North Dakota already ban most noncompetes, and this trend continues to expand.

Around the Courts

Effective Date: March 6, 2026

What’s Changing:

On March 6, 2026, the U.S. Court of Appeals for the Third Circuit decided Massey v. Borough of Bergenfield and rejected the higher hurdle that had applied to certain discrimination claims under New Jersey law.

Before this decision, majority-group employees, including white or male employees, had to take an extra step to move a discrimination claim forward. They had to show “background circumstances” suggesting discrimination.

The Third Circuit rejected that approach and held that courts should apply the same standard to all plaintiffs. Relying on the U.S. Supreme Court’s 2025 decision in Ames v. Ohio Department of Youth Services, the court removed the heightened requirement in cases brought in federal court.

Massey is the first federal appellate decision to apply Ames to a state discrimination law. In this case, a white male police officer alleged the municipality passed him over for a promotion in favor of a lower-ranked candidate. Under the prior approach, his claim faced a higher threshold. Under this framework, all discrimination plaintiffs face the same evidentiary burden at the pleading and summary judgment stages.

What This Means for HR:

New Jersey employers should expect more of these claims, and they may not go away as quickly as they once did. That does not change the need for lawful diversity practices. It does put more pressure on consistency and documentation.

Tie employment decisions to clear, job-related criteria and apply them the same way across employees. Make sure decision-makers follow that approach. That is what holds up if someone challenges a decision.

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