U.S. Supreme Court Labor Case Preview: What Employers Need to Watch in 2025

The U.S. Supreme Court has agreed to hear several high-profile labor-related cases that could reshape employer obligations and redefine the authority of federal agencies. These decisions will have far-reaching implications for HR compliance and business operations. Below, ILS Managing Partner Richard Liu and Attorney Ran Shu outline the core risks and strategies employers should consider.

If you or your business operate in California, New York, or other states and need legal support for employment contract compliance or workforce risk management, please contact the ILS legal team at contact@consultils.com. We deliver strategic, efficient solutions to help you navigate policy changes and manage labor risks with confidence.

Case 1: Trump v. Slaughter

This is the most consequential case for employers this term. At its core, the case challenges whether the President can expand their authority to remove leadership from independent regulatory agencies like the Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), and the Federal Trade Commission (FTC). Oral arguments are scheduled for December 2025.

Key Employer Impacts

• Frequent Policy Shifts: If agency leadership becomes more easily replaceable, employers may need to regularly revise compliance policies and employee training to align with shifting regulatory standards.

• Rising Compliance Costs: Constantly changing enforcement standards may require repeated updates to labor contracts, pay practices, and handbooks, increasing reliance on legal and HR teams.

• Increased Oversight: The FTC is expanding its regulatory scope to include non-competes, wage-fixing, contractor classification, and AI-related employment practices—raising the risk of investigations and penalties.

• AI Compliance Scrutiny: Employers using AI for hiring, evaluations, or HR management may face increased scrutiny around data privacy and algorithmic fairness.

• Long-Term Planning Disruption: With opposing enforcement priorities under different administrations, employers will struggle to plan compensation and workforce strategy long-term.

Richard Liu, Esq.’s Insight

Historically, no U.S. president has ever filed a lawsuit against the federal government. Trump’s decision to sue agencies within the very government he once led is unprecedented. At its core, this represents a fundamental constitutional shift—one that places the Supreme Court in the position of determining the boundaries of presidential authority and how transitions of power between administrations should function.

Moreover, as a businessman-turned-president, Trump appears to be testing the outer limits of executive power. No prior president has attempted to assert such expansive authority. His actions reflect an effort to challenge constitutional constraints and potentially redefine the scope of presidential power. These lawsuits should not be viewed merely as disputes over specific issues, but as a bellwether for the broader direction of American political and constitutional development.

Susan Shu, Esq.’s Insight

If the Court ultimately rules that the President or executive branch has broader authority to remove agency leaders at will, the independence of regulatory agencies may be significantly diminished. Enforcement priorities could shift rapidly with each change in administration.

In addition, faster turnover among agency heads would likely lead to more frequent policy changes. As a result, corporate HR and legal teams should enhance their internal monitoring systems—tracking who leads key agencies, their enforcement preferences, and any shifts in regulatory focus. This will enable timely updates to employment contracts, handbooks, algorithm governance policies, and worker classification frameworks. In short, both the cost and complexity of compliance are likely to increase.

Case 2: M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund

This case concerns the calculation of “withdrawal liability” under multi-employer pension plans governed by ERISA. The Supreme Court will decide whether current formulas for determining employer exit costs are flawed or overly burdensome.

Key Employer Impacts:

• Lower Exit Costs: A pro-employer ruling may reduce the financial burden of leaving a multi-employer pension plan.

• Greater Flexibility: Employers could gain more freedom to restructure pension participation without incurring heavy penalties.

• Short-Term Uncertainty: Until a final ruling is issued, employers must account for possible shifts in liability calculations during financial planning.

Susan Shu, Esq.’s Insight

If the Supreme Court ultimately rules in favor of the employer, the decision could offer short-term relief for businesses. Under the current system, “withdrawal liability” from multi-employer pension plans is often seen as a major constraint on corporate financial decision-making. If the Court endorses more flexible assumptions and calculation methods, the financial burden of exiting such plans could be significantly reduced. This would not only ease financial pressure but also give employers greater strategic control in restructuring their pension obligations.

That said, until a final ruling is issued, employers remain in a period of regulatory uncertainty. Companies participating in these plans should closely monitor case developments and build flexibility into contract negotiations, retirement benefit structures, and capital planning to guard against potential shifts in liability and compliance requirements.

Case 3: Geo Group, Inc. v. Menocal

This case addresses whether federal contractors can immediately appeal the denial of “derivative sovereign immunity” before a case concludes. The decision will define how early in litigation contractors can challenge court rulings in disputes tied to government work.

Key Employer Impacts:

• Higher Litigation Costs: If early appeals are barred, contractors must wait until final judgment to challenge rulings—escalating costs and reputational risk.

• More Control Over Risk: A favorable decision would let federal contractors challenge unfavorable rulings earlier, reducing long-term litigation exposure.

• Greater Contracting Certainty: Employers in government-related work would benefit from clearer procedures in employment disputes.

Susan Shu, Esq.’s Insight

This ruling could significantly reshape litigation strategy for federal contractors. If early appeals are disallowed, contractors will face longer, more expensive lawsuits. Employers engaged in government contracts should review clauses related to dispute resolution, appeal timing, and liability allocation to preserve flexibility.

Strategic Takeaway for Employers

These cases reflect broader shifts in labor enforcement, constitutional governance, and workforce compliance. If the Supreme Court favors employer flexibility, labor agency power may be curtailed, and cost-saving reforms could take hold. However, outcomes remain uncertain.

ILS recommends that employers:

• Closely monitor policy and leadership changes in agencies like the DOL, NLRB, FTC, and EEOC

• Proactively review contracts, handbooks, and tech policies

• Engage legal counsel early to anticipate compliance risks

• Build flexibility into workforce planning and benefits structures

Recent ILS Wins & Legal Insights

ILS continues to secure results across high-impact employment cases. Recent wins include:

• Richard Liu, Managing Partner of Innovative Legal Services, Secures Victory for its Client Through Swift Action and Innovative Legal Strategy; Click here to read the full case's strategies.

• ILS Secures Multi-Million Settlement for Its International Logistics Client; Click here to read the full case's strategies.

• ILS Successfully Defends Public Company in U.S. Government Investigation, Securing Complete Relief from Heavy Fines; Click here to read the full case's strategies.

• ILS Resolves Restaurant Industry Dispute, Avoids Major Liability; Click here to read the full case's strategies.

Through strategic litigation and compliance planning, ILS helps employers turn risk into opportunity.

If you or your business operate in California, New York, or other states and need legal support for employment contract compliance or workforce risk management, please contact the ILS legal team at contact@consultils.com. We deliver strategic, efficient solutions to help you navigate policy changes and manage labor risks with confidence.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

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As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.

Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.

Email: contact@consultils.com | Phone: 626-344-8949

Susan is specialized in employment law and compliance, with additional experience in cross-border investments. With years of experience advising multinational clients, Susan focuses on employment-related matters, including workforce structuring, employee transfers, terminations, compensation and benefits, and workplace policies. She has extensive experience assisting companies in navigating complex labor regulations, managing cross-border employment issues, and resolving workplace disputes.

In addition to her employment law practice, Susan advises on M&A, private equity, venture capital, and cross-border investments. She has assisted international investors with complex deal structures, including VIE frameworks, and prepared due diligence reports and transaction documents.

Email:  contact@consultils.com | Phone: 626-344-8949