Recent Blog Posts

Earlier today, the U.S. Department of Labor (“DOL”) announced a proposed rule intended to provide greater clarity for both workers and employers on how to determine whether a worker should be classified as an independent contractor or an employee under the Fair Labor Standards Act (“FLSA”) and other related laws. 

Issued on February 26, 2026, the proposal – titled “Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act” – would rescind the Biden era rule (the “2024 Rule”) and replace it with a framework very similar to what we saw adopted in 2021 during the first Trump administration (the “2021 Rule”). 

Level One: Ancient Origins 
Under the FLSA, the central question in determining worker classification is whether the individual is economically dependent on the operation, indicating employee status, or is truly “in business for themselves,” which supports independent contractor status. This distinction matters because workers classified as employees are entitled to FLSA protections, including minimum wage and overtime requirements.  

While agricultural employers may benefit from certain exemptions under the FLSA, the analysis does not end there. Many state labor laws look to the FLSA’s definition of “employee” when deciding whether their own wage and hour protections apply. In some cases, state laws impose broader requirements and offer greater protections than federal law. Independent contractors, by contrast, are not covered by FLSA wage and hour protections and generally exempt from state labor law requirements. 

Classification of a worker is vitally important because misclassification can come with harsh consequences. If misclassification is discovered, whether through a DOL investigation, a worker complaint, or a lawsuit, the employer may be required to pay back wages, civil money penalties imposed by the DOL, and any attorneys’ fees and court costs should the matter end up in litigation. Beyond wage-and-hour issues, misclassification can trigger additional liability under other federal and state laws. This might include civil claims for unpaid payroll taxes, unemployment insurance contributions, or workers’ compensation violations, as well as potential criminal penalties in extreme cases of willful or repeated noncompliance.  

Level Two: Trial by Fire
As originally enacted, the FLSA does not lay out a precise test for distinguishing an employee from an independent contractor. Over time, the DOL looked to the courts to develop a workable standard for making such determinations. Through those decisions, the “economic realities test” emerged and became the framework for evaluating whether a worker should be classified as an employee or independent contractor. 

The economic realities test is a “totality of the circumstances” approach, meaning that no single factor controls the outcome. Instead, all relevant factors must be considered and weighed together to assess the true nature of the working relationship. Those factors include: 

1. The nature and degree of control; 
2. The individual’s opportunity for profit or loss;
3. The permanency of the work relationship; 
4. Whether the work being performed is an integral part of the employer’s business; 
5. The worker’s investment in facilities and equipment; and 
6. Skill and initiative. 

For decades courts and the DOL have applied these factors, or slight variations of them, to determine worker status under the FLSA. Over time, however, application of the test varied across jurisdictions, with some courts placing greater emphasis on certain factors than others. This inconsistency led to differing and inconsistent interpretations of worker classification around the country.  

Level Three: The 2021 Rulebook Rewrite 
In 2021, the DOL attempted to address the inconsistent and often subjective application of the economic realities test by issuing a formal independent contractor rule. This 2021 Rule marked the agency’s first effort to create a more standardized framework for distinguishing between employees and independent contractors. 

The 2021 Rule used a variation of the economic realities test but explicitly gave greater probative value to “two core factors.” The two core factors are: 

1. The nature and degree of control over the work; and 
2. The individual’s opportunity for profit or loss.

The Department did not eliminate the other factors of the economic realities test; those factors remained part of the analytical framework under the 2021 Rule. However, the DOL did determine that the two “core factors” carried the most weight when determining whether an individual is economically dependent on an employer. The DOL further explained that when both core factors pointed toward the same classification, there was a “substantial likelihood” that the resulting classification was the correct classification.

Level Four: The 2024 Reset
In early 2024, the DOL published another rule, repealing the 2021 Rule and reverting back to a totality of the circumstances analysis of the economic realities test in which there are no core factors, and all factors are weighed evenly. The 2024 Rule went into effect on March 11, 2024. 

Level Five: 2026 Counterattack
The latest proposed rule would reinstate the framework of the 2021 Rule, with several targeted adjustments designed to provide clearer guidance and promote more consistent interpretation/application of the test. The stated goal is to reduce uncertainty and, in turn, lower the risk of misclassification claims or enforcement actions that can disrupt day-to-day operations. 

In addition to reinstating and slightly modifying the 2021 Rule, the proposal would also apply the independent contractor analysis to the Family and Medical Leave Act (“FMLA”) and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”), each relying on the FLSA’s definition of “employ.”

In its proposal, the DOL explained that the 2024 Rule failed “to provide effective guidance on how different factors in its multi-factor balancing test should be weighed or applied together.” The DOL contends that it’s two core factor economic realities test is just a result of decades and decades of case law. The Department indicates that after reviewing numerous judicial decisions, “the Department determined that courts tended to focus on two economic reality factors – control and the opportunity for profit or loss.” Thus, the DOL determined that in effect, judges were giving greater weight to these two factors to determine a worker’s classification under the FLSA.

However, the DOL emphasizes that even when the two core factors point toward the same classification they are not “controlling.” Their combined weight may still be outweighed by other considerations, making it “necessary to consider both [core and non-core] factors.” In short, the test that the DOL seeks to readopt is not intended to be applied “in a mechanical way that precludes consideration of all relevant facts and factors.” 

Some other modifications proposed by this new rule include: 

• Clarification on how an employee’s economic dependence on an employer differs from the relationship between independent businesses working together.
• Highlighting that worker classification hinges on dependence for the work, not on how much money the worker makes. 
• Modifying the real-world examples used to apply the proposed 2026 framework to avoid potential ambiguity in the law; and 
• Emphasis on the fact that the actual practice of the worker and potential employer is more relevant than what may be contractually or theoretically possible. 

You can read the proposed rule here.  

Boss Level Unlocked: Power Up with Public Comment
Ever wished you could help shape the rulebook? Well, now’s your chance! 

The proposed rule kicks off a 60-day public comment period, closing April 28, 2026. You can submit a comment on the proposed rule to help provide greater clarity or protections for your specific industry or area of interest. 

You might be wondering, “Can my comment really make a difference?” The answer: absolutely! Agencies are required to consider all substantive comments, and those that are unique, evidence-based, and grounded in real-world experiences are far more likely to influence the final rule than generic statements along the lines of “this is good” or “this is bad.” 

If you have noticed gaps or issues that the DOL has not addressed in this proposal, now is the perfect time to bring them to light. Don’t miss the opportunity to make your voice heard, you never know, your input could truly change the law! 

Comments can be submitted at https://www.regulations.gov (Docket No. WHD-2026-0001). Once comments are closed, the DOL will review and consider those comments, make any final modifications, and publish the final rule.   

As always, as we learn more about this proposed rule and any final rule, we will keep you up to date.

Data centers are Ohio’s newest land use controversy.  With concerns ranging from water use to electricity prices to loss of farmland, the rapid onset of data center development has generated many questions and conflicts across the state.  In response, members of the Ohio legislature have introduced several bills on data center development, and we should see a few more bills introduced soon.  Here’s a review of recently introduced legislation.

Data Center Study Commission.  The first bill is H.B. 646, which would require formation of a Data Center Study Commission to study data center impacts in Ohio.  We explained H.B. 646 in an earlier post.  The bill had its first hearing before the House Technology and Innovation Committee on February 17, where the sponsors testified that data center development “introduces complex and immediate challenges” and that “it is both prudent and necessary that we, as policymakers, take the time to fully understand its implications and adopt an informed, integrated approach…”  The bill is already scheduled for a second hearing on February 24, an indication of continued interest in moving the bill forward.

Prohibitions on nondisclosure agreements. A second bill, H.B. 695, doesn’t address data centers directly but instead targets elected local officials who could have knowledge of such developments. The bill would prohibit county commissioners, township trustees, and village mayors and council members from knowingly entering into nondisclosure agreements that prohibit “disclosing, discussing, describing, or commenting on” matters related to official duties.   The bill would make the agreements void and unenforceable and impose civil fines of up to $1,000 on officials who violate the law. Rep. Brian Stewart (R-Ashville), co-sponsor of the bill along with Rep. Adam Bird (R-New Richmond), explains that “in 11 years as a local elected official - dealing with scores of major development projects - I never signed an NDA, and I never would. Secrecy breeds distrust amongst the taxpayers, which is detrimental to economic development efforts.” The bill was referred to the House Local Government Committee on February 18, 2026.

Requirements for data center customers. A bi-partisan bill  introduced on February 17, 2026, by Rep. Tristan Rader (D-Lakewood) and Rep. David Thomas (R-Jefferson) aims to “ensure costs of new infrastructure and grid upgrades needed to serve these facilities are not shifted onto existing Ohio ratepayers.”  H.B. 706 would require long-term service agreements of at least 12 years with electric utilities for data center customers, require the Public Utilities Commission to create standards for interconnection practices, load study deposits, and milestone requirements. It would also prohibit utilities from recovering data center costs from other customer classes, set minimum gilling standards, and require financial assurance prior to facility construction. 

Democrats in the legislature suggest that several additional data center bills are under development.  Proposals we still might see include granting local governments the authority to reject proposed data center projects, eliminating the sales tax exemption for data centers, requiring facilities to cover costs for additional power generation or transmission, and establishing water consumption limits, reporting, and investments in water infrastructure.  Keep an eye on the Ohio Ag Law Blog for continued updates on data center legislation in Ohio.

The well-known advantages of business entities include liability protection, tax management, and shared management responsibilities. A lesser-known advantage is the relative ease of transferring ownership. When assets such as land, machinery, or livestock are held in an entity like an LLC, ownership interests in the entity can often be transferred far more efficiently than transferring each asset individually. Rather than retitling deeds, updating equipment titles, or reassigning livestock ownership, a transfer of membership interests can effectively shift ownership of all underlying assets in a single step.

Funding the LLC

The first step is to form the LLC and transfer the assets into it. Land is conveyed by deed, titled vehicles by title transfer, and untitled assets such as machinery and livestock by written assignment. This step is critical. Until the LLC is established and owns the assets, there is no entity ownership interest to transfer.

Transferring Ownership

Once the LLC is established and the assets are transferred to it, ownership interests can be transferred with relatively simple documentation. The transfer document should identify the current owner, the recipient, the percentage or units being transferred, the purchase price or value of the gift, and the effective date of the transfer. Both parties should sign and date the document. 

Documenting Value

While the transfer of ownership is relatively simple, it is important to document the value of the ownership being transferred.  If the transfer is a sale, the value will determine the amount of taxes that may be owed.  If the transfer is a gift, the value will determine if the transfer impacts the federal estate tax exemption. 

The value of a gifted ownership interest is its fair market value. That value should be supported by an appraisal or reliable market data. If the gift is undervalued, the IRS can adjust it to fair market value, potentially creating adverse tax consequences. While it may be tempting to rely on county auditor values or informal estimates for land, the better practice is to obtain a qualified appraisal. Although an appraisal adds expense, it is often a worthwhile investment to reduce the risk of problems in an IRS audit.

Example

Consider the following example to illustrate gifting through a business entity.

Farmer owns a farm and would like to gift it to Daughter. To minimize potential estate tax concerns, Farmer plans to make annual gifts over ten years, keeping each gift within the annual exclusion amount. Without using a business entity, Farmer would need to execute and record a new deed each year to transfer the annual interest in the property.

If the farm is first transferred to an LLC, however, each annual gift can be completed by transferring membership interests in the LLC through a simple written assignment. This approach avoids repeated deed preparation and recording. In addition, transfers of LLC interests are private transactions, while deeds are recorded and become public record.

As this example illustrates, using a business entity can make ownership transfers relatively simple. For farm and business owners considering a sale or gift of ownership, it may be worthwhile to explore whether establishing an entity would facilitate the transition. Because ownership transfers can carry significant tax and legal implications, legal and tax advisors should be involved in the planning process.

Note: for a thorough discussion on the tax implications of gifting, see the Gifting Assets Prior to Death bulletin available at farmoffice.osu.edu.

Over the past several years, numerous lawsuits have been filed against the Monsanto Company regarding the safety of its herbicide Roundup and its main ingredient glyphosate. On January 16, 2026, the Supreme Court of the United States granted the Monsanto Company’s petition to review one of these cases from the Missouri Court of Appeals, Durnell v. Monsanto Company.

Background of the case

In 2019, John Durnell of St. Louis sued Monsanto in Missouri state court, arguing that exposure to glyphosate contained in Roundup caused his non-Hodgkin’s lymphoma.  Mr. Durnell argued that Monsanto should be found strictly liable for defective design of its product and for failure to warn users of the danger of using Roundup, as well as negligence. 

At trial, the jury sided with Monsanto on the defective design and negligence claims, meaning that the company was not found liable for these claims.  On the remaining claim, the 12-person jury unanimously found Monsanto to be strictly liable for its failure to warn of the risks of using glyphosate, granting Mr. Durnell $1.25 million in compensatory damages.

Eventually, Monsanto appealed the case to the Missouri Court of Appeals, claiming that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) preempts failure to warn claims under state law. Federal preemption of state law can happen either expressly or impliedly. Express preemption happens when a federal statute contains language that specifically says that other laws or requirements cannot be imposed. Implied preemption happens when there might not be explicit language in a statute calling out the preemption, but Congress’s intent to supersede state law is implicit due to the nature of the statute.  Here, the appeals court did not find Monsanto’s preemption argument persuasive; instead finding that the language in FIFRA did not expressly preempt Mr. Durnell’s failure to warn claim, and that there was no implied irreconcilable conflict between the state and federal law. You can read the Missouri Court of Appeals opinion in its entirety here.

Since the Missouri Supreme Court declined to hear the case, Monsanto filed a petition with the Supreme Court of the United States to review the Missouri Court of Appeals’ decision on April 4, 2025. On January 16, 2026, the Supreme Court granted Monsanto’s petition, agreeing to review the case. The Court has limited its review of the case to one question: “whether the Federal Insecticide, Fungicide, and Rodenticide Act preempts a label-based failure-to-warn claim where EPA has not required the warning.”

What are each side’s arguments for the Supreme Court?

In the lead up to a Supreme Court determination to hear a case, the legal teams for both parties file documents explaining why or why not the case should be heard.  The party asking the Court to hear the case (in this case, Monsanto) files a petition for writ of certiorari, laying out their reasons for asking for review. Then the respondent (Durnell), has a chance to file a brief with the Court detailing their arguments as to why the lower court’s decision should stand.  These documents can give us some insight into how each party may form its arguments if the case is heard before the Supreme Court.

Between the two parties in this case, there are hundreds of pages laying out their lines of reasoning for hearing or not hearing the case. In its most basic form, Monsanto’s argument is that language in FIFRA expressly preempts state requirements for the labeling and packaging of herbicides like Roundup. The language they point to is in Chapter 7 of the U.S. Code, Section 136v(b) and reads: “state(s) shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter.” You can see the statute here.  FIFRA requires pesticides to be registered with the federal Environmental Protection Agency (EPA) before they can be sold or distributed in the country. Monsanto asserts that because EPA continues to accept Roundup’s product registration under FIFRA without requiring the company to include any warning or caution statement about the possible health risks of glyphosate on its labeling, any state law claim that would require such a warning should be overridden.  You can read Monsanto’s petition for writ of certiorari here.

For their part, Mr. Durnell’s legal team points to a case previously decided by the Supreme Court in 2005, Bates v. Dow AgroSciences LLC (you can read that case here), in which the majority determined that state common-law claims like failure-to-warn are not automatically preempted by the language of FIFRA Section 136v(b). In Bates, the Court found that while FIFRA does preclude states from imposing different or additional labeling requirements for pesticides, it does not preclude states from imposing different or additional remedies. In other words, since “FIFRA does not provide a federal remedy to farmers and others who are injured as a result of a…violation of FIFRA’s labeling requirements, nothing in [FIFRA] precludes the states from providing such a remedy.” Furthermore, Mr. Durnell’s lawyers argue that EPA’s continued acceptance of Roundup’s product registration does not necessarily prevent the requirement of a cancer or health warning on the label, it just means that that Monsanto has not provided any evidence of glyphosate’s potential health effects or asked EPA to consider including such a warning. You can read Durnell’s response here.

What’s next?

While it can be fun to predict the outcome of Supreme Court cases, between the language of FIFRA and case law, I can’t begin to guess where the Court will end up in this case. What is certain is that the Court will examine “whether the Federal Insecticide, Fungicide, and Rodenticide Act preempts a label-based failure-to-warn claim where EPA has not required the warning.” Oral arguments for each side will happen sometime between October 2026 and April 2027, and the Court may release an opinion on the case in May or June of 2027. Additionally, the Court’s final decision will likely have implications for similar lawsuits regarding Roundup and glyphosate throughout the country. We will do our best to keep you updated on this complicated case as it works through the system. In the meantime, additional court documents and filings on the case can be found here.