If you’ve been keeping an eye on the legal landscape out West, you already know the Ninth Circuit is basically the Wild West of labor regulations. But lately? It's been even more unpredictable than usual. 2026 has barely kicked off, and we're already seeing massive shifts in how companies handle everything from pension plans in Las Vegas to religious hiring in Washington.
Honestly, it's a lot to track. You've got the Ninth Circuit Court of Appeals—the massive body covering Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington—dropping rulings that feel like they're pulling in two different directions at once. One day they're tightening the screws on independent contractor status, and the next, they're handing a big win to religious nonprofits.
If you're an employer or just someone who cares about workplace rights, you can't really afford to ignore this. Here is the actual, no-fluff breakdown of the ninth circuit employment law news that matters right now.
The "Jersey Boys" Ruling: A Massive Shakeup for Pensions
Let's start with something specific but weirdly impactful. Just a few days ago, on January 6, 2026, the Ninth Circuit handed down a decision in Nevada Resort Association v. JB Viva Vegas, LP. This case is a classic "legal loophole" story that went sideways for the pension fund.
Basically, there was this production of the musical Jersey Boys in Las Vegas. When the show closed in 2016, the pension trust sent the employer a bill for nearly $1 million in "withdrawal liability." The employer argued they were exempt under the "entertainment industry" exception. The trust hit back, saying, "Wait, these workers spend most of their time doing convention and trade show work, not 'real' entertainment. They don't qualify."
The Ninth Circuit basically said: "It doesn't matter."
The court ruled that if a worker does any entertainment work, they count toward the industry exemption. There is no minimum threshold. You don't have to spend 51% of your time on stage or backstage at a musical to be an "entertainment employee." This is a huge win for Las Vegas venues and entertainment employers across the circuit because it drastically reduces the risk of being slapped with massive pension withdrawal bills just because the local market shifted toward conventions.
Religious Freedom vs. State Hiring Rules
Then we have the ruling in Union Gospel Mission of Yakima v. Brown. This is one of those cases that makes people nervous because it touches on the First Amendment.
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For a long time, there was this thing called the "ministerial exception." It meant churches could hire and fire their "ministers" however they wanted. But what about the IT guy? Or the person running the homeless shelter’s kitchen? Washington State tried to say those people are just regular employees and should be protected by standard anti-discrimination laws.
The Ninth Circuit just pushed back hard. They ruled that faith-based groups have a constitutional right to hire based on their beliefs even for non-ministerial positions. The logic? Every employee is a "de facto spokesperson" for the organization’s mission. It’s a major pivot toward "church autonomy," and it’s likely going to end up at the Supreme Court soon.
The Never-Ending Battle Over Independent Contractors
If you thought the "ABC Test" was going away, I have bad news. In 2025 and moving into 2026, the Ninth Circuit has doubled down on AB 5.
Trucking associations have been fighting this for years, arguing that it’s unconstitutional to tell an independent owner-operator they have to be an employee. They claimed it messed with "interstate commerce." But in Owner-Operator Independent Drivers Association v. Bonta, the court basically said "Nice try."
The ruling confirms that the ABC test is the law of the land in California. If you’re a business using contractors, you have to prove three things:
- The worker is free from your control.
- They do work that is outside your usual business (e.g., a plumber fixing a leak at a law firm).
- They are established in their own independent business.
Prong B is the absolute killer. If you are a delivery company and you hire "independent" delivery drivers, you're almost certainly failing that test. The Ninth Circuit is making it crystal clear: the era of the gig-economy loophole in the West is closing.
Pay Transparency: Not Just a Suggestion Anymore
California’s SB 642 just went into effect on January 1, 2026, and the Ninth Circuit’s recent stance on pay equity is backing it up.
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Most people think "pay transparency" just means putting a range on a job posting. But the new rules are way more aggressive. You now have to define the "pay scale" as what you reasonably expect to pay upon hire. No more posting a range of $50k to $500k just to cover your bases.
What's actually changing in 2026:
- The Definition of Wages: It now includes everything. Bonuses, stock options, travel reimbursements, and even life insurance. If you pay a man more in stock options than a woman for the same work, you’re in trouble.
- Statute of Limitations: It’s now three years, but plaintiffs can reach back for up to six years of back pay. That is a massive financial liability.
- Prior Salary: This is the big one. The Ninth Circuit has held firm that you cannot use a candidate's prior salary to justify a pay gap. Even if they asked for a lower number because they were underpaid at their last job, you can't use that as a defense.
The NLRB Wins a Round
A bunch of companies tried to sue the National Labor Relations Board (NLRB), claiming the whole board was unconstitutional. They argued that because the board members can’t be easily fired by the President, it violates the separation of powers.
The Ninth Circuit wasn’t having it. In late 2025, they rejected these attacks, which means the NLRB still has the power to come after you if you fire an employee for talking about their wages or trying to organize. In fact, the court recently upheld a ruling that protected an employee who secretly recorded a meeting where their boss was threatening them about wage discussions.
That’s a scary thought for managers. In the Ninth Circuit, if a recording reveals illegal activity (like union-busting or pay-talk suppression), the fact that it was "secret" might not save the employer.
Misconceptions You Should Probably Shake Off
I hear this a lot: "The Ninth Circuit is so liberal, they'll always side with the employee."
That’s actually not true lately. Look at the Detwiler v. Mid-Columbia Med. Ctr. case from late 2025. An employee tried to claim a religious exemption for a vaccine by saying her "body is a temple." The Ninth Circuit actually ruled against her.
They said that just using "magic words" like "Christian" or "temple" isn't enough. If your belief is actually just a personal or medical preference masked as religion, the court isn't going to protect you. They are starting to demand a "bona fide" connection to a religious principle.
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Actionable Steps for 2026
If you're running a business or managing a team in the Ninth Circuit, you've got to stop using 2022's playbook. Things are moving too fast.
Audit your contractor list. If you have people on 1099s who do work that is central to your business, you need to transition them to W-2s or prepare for a very expensive lawsuit. The Ninth Circuit is currently the least friendly place in the country for the "independent contractor" model.
Revamp your job postings. Ensure your pay ranges are "good faith" estimates. If you hire someone at $100k but your posting said the max was $90k, you’ve just created evidence for a future lawsuit.
Update your employee handbooks on recordings. While you can't always stop secret recordings if they're used to document illegal acts, you can have narrow policies against recording trade secrets or proprietary processes. Just don't make the policy so broad that it "chills" protected speech about working conditions.
Check your arbitration agreements. The Ninth Circuit recently did an about-face in Chamber of Commerce v. Bonta, admitting that the Federal Arbitration Act (FAA) usually trumps California’s attempts to ban mandatory arbitration. This means you can likely still require arbitration, but you have to pay the fees on time. If you're even a few days late on an invoice, you might lose the right to arbitrate entirely.
Staying compliant in the Ninth Circuit isn't about following one rule; it's about staying agile as the court navigates these weird, conflicting tensions between state laws and federal mandates.