MORE FROM 2025 Trump Administration Rolled Back Biden-Era Labor Law Policy NLRB Acting General Counsel William Cowen issued a memo in February that rolled back more than a dozen pro-labor policy endorsements touted by the agency’s former GC. This development has wide-ranging impacts for manufacturers, including reduced danger of expanded remedies and elimination of a ban on most “stay or pay” agreements. Courts Split on Liability Standard for Workplace Harassment by a Non-Employee A 6th Circuit decision in August makes it harder for plaintiffs to succeed on discrimination claims based on non-employee conduct – a risk that is higher in manufacturing given how frequently your workforce interacts with customers, clients, vendors, and other MORE FROM 2025
2025 PREDICTIONS RECAP
MANUFACTURING
third parties. However, employers should continue to take third-party harassment seriously, especially because the 6th Circuit’s new intent-based Title VII standard is not the norm nationwide and is at odds with EEOC regulations. SCOTUS Declined to Resolve Dispute Over Pay for Donning and Doffing Time A manufacturer will have to pay $22M in alleged wage and hour violations now that the Supreme Court declined in November to consider its appeal. The 3rd Circuit upheld the sizable jury verdict in 2024, finding that the company improperly paid employees for time spent donning special gear and showering after working with hazardous materials. The appeals court said the employer had to pay hourly employees for the actual time they spent completing activities, not just the reasonable time it should take to finish assigned tasks.
We correctly predicted that the Trump administration would bring both challenges and opportunities for manufacturers. President Trump signed the “Big Beautiful Bill” in July, which includes a significant tax break for investments in machinery and equipment integral to manufacturing processes and certain plant modernization efforts. On the other hand, the new law’s tariffs on imported goods (including steel, aluminum, and other common components used in domestic manufacturing operations) could increase costs for domestic producers that rely on global supply chains. And its major funding increase for immigration and enforcement could make talent acquisition and employee retention more difficult, particularly for manufacturers that have historically relied on a foreign-born workforce. “Big Beautiful Bill” Brought Mixed Bag for Manufacturers A Deregulation Wave Came As Expected, But Distribution Was Patchy The Trump administration engaged in impactful deregulatory action throughout 2025. In July, OSHA issued a heap of proposed regulatory rollbacks and slashed potential penalty amounts for certain employers. The administration has also relaxed environmental and labor rules to streamline permitting and encourage new domestic investments in domestic manufacturing. However, the administration’s deregulatory efforts were not quite as widespread as we’d predicted. For example, “America’s AI Action Plan,” which the White House released in July, said that the federal government should not allow AI-related federal funding to be directed toward “states with burdensome AI regulations that waste these funds.”
PREDICTIONS FOR 2026
Tariffs Will Continue to Impact Sector – But to a Lesser Degree The Trump administration’s tariffs impacted multiple borders, products, and industries in 2025. Those tariffs have been subject to change, negotiation, and legal challenges. We anticipate tariffs will continue to impact the industry in 2026 – but to a lesser degree. This will in part depend on the Supreme Court’s upcoming decision in Learning Resources, Inc. v. Trump . Given the administration’s recent pullback on some imports and the SCOTUS decision we anticipate in 2026, we expect the impact of tariffs to be less of an issue in 2026. Nonetheless, manufacturers will need to remain vigilant and flexible in the face of supply chain pricing uncertainty. Continued Immigration Enforcement In light of increased funding for immigration enforcement and “Build American” politics, manufacturers should prepare for continued immigration audits and workplace “raids” by agencies like ICE in the coming year. Employers should prepare their workforce for this possibility by conducting basic workplace security and investigation training. Additionally, employers should ensure they maintain accurate and compliant I-9 documentation.
Continued Adoption and Evolution of Technology
As we predicted, continued development and expanded application of AI tools created areas of opportunity for manufacturers outside of direct production applications. According to Deloitte’s 2025 Manufacturing and Operations Survey, manufacturers are focused on “investing in and adopting core systems to enable smart manufacturing and operations,” with respondents reporting advanced production scheduling (35%), executive systems (33%), and quality management (28%) as top investment priorities for core systems. We also correctly predicted that the CHIPS and Science Act, which President Biden signed in 2022, would continue creating tangible benefits (like this $325M CHIPS award announced in early January) for manufacturers seeking access to semiconductors and other key component parts necessary to drive their production efforts forward. And the “Big Beautiful Bill” will boost the semiconductor investment tax credit from 25% to 35% for property placed in service after December 31, 2025.
Colin P. Calvert Irvine Partner, Co-Chair
Stephen C. Mitchell Columbia Regional Managing Partner, Co-Chair
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