DROPLETS

The 120th Congress, scheduled to convene on January 3, 2027, has already returned to the House and Senate a decisive Democratic majority following the 2026 midterm elections. This political shift suggests congressional oversight—particularly through investigative committees—could intensify across a range of policy areas, from antitrust and corporate governance to financial regulation and technology. BigLaw counsel should anticipate increased demands for assistance in compliance, data disclosures, and potential subpoenas, especially from clients dealing with federal investigations or those whose operations intersect with policy priorities of the new majority. Clients should review their record‑keeping practices, internal compliance programs, and contingency plans for investigative requests, as the new congressional order may accelerate the pace and scope of investigations during the 120th Congress. Monitoring committee allocations, leadership changes, and early investigative proposals will help counsel advise clients on probable areas of scrutiny.

The November 3 mid‑term results will usher in a 120th Congress dominated by Democrats, who have already signaled an aggressive oversight agenda—especially toward the former Trump administration. BakerHostetler outlines the key differences between congressional inquiries and traditional litigation, emphasizing that committees can issue subpoenas without establishing probable cause and that common‑law privileges may be subject to waiver. Companies with government contracts, political donations or emerging technologies may find themselves under immediate, highly public scrutiny; failing to prepare can expose them to reputational, regulatory or litigation risks. The guide recommends stress‑testing internal procedures, preserving records, coordinating cross‑departmentally, and conducting mock testimony to handle media‑charged questioning. By building a coordinated response now—rather than reacting to a formal request—clients can manage the political, legal, and commercial dimensions of a congressional probe.

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The UK government announced on Oct 12 2026 a consultation on reforming the existing whistleblower framework by creating a new Self‑Reporting Channel for the Serious Fraud Office (SFO) and announcing a financial reward scheme for whistleblowers. The proposal aims to encourage more timely disclosure of fraud and corruption by offering monetary incentives, and it would replace the current ad‑hoc reporting mechanisms. For counsel, the change means advising clients on setting up compliant internal reporting structures, assessing reward eligibility, and coordinating with SFO procedures. Clients in finance, manufacturing, and public‑sector contracts will need to review their compliance policies and potentially adopt new whistleblowing hot‑lines. The consultation will run for a set period, after which the government will publish a revised framework. Key next steps include monitoring comment dates, analyzing the draft scheme, and preparing clients for potential shifts in regulatory expectations. Uncertainty remains as the final reward amounts and procedural details have not yet been finalized

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On October 29, 2026, the FTC, joined by attorneys general from Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah, filed a lawsuit against Toast—a meal‑order platform—claiming that the company’s ‘$0’ pricing strategy is deceptive. Under the complaint, Toast’s marketing materials state that users can order food for free, while in practice customers face a series of add‑on fees, mandatory subscriptions, and steep cancellation penalties that are not clearly disclosed upfront. The lawsuit seeks statutory damages, injunctive relief, and a rule‑making directive that would compel more transparent pricing for app‑based food services. The case signals a broader regulatory push against pricing opacity in the online marketplace, potentially prompting major tech and e‑commerce firms to re‑evaluate their fee structures. Practitioners should advise clients involved in subscription or transaction‑fee models to review their disclosures, and stay alert to possible federal guidance that could tighten the definition of “free” services nationwide.

On Oct 8, 2026, the European Commission imposed a $44 million penalty on Kingspan for providing incorrect or misleading information during its merger investigation. The ruling signals a sharp rise in the Commission’s scrutiny of informational compliance under Competition Law. For M&A practitioners, the case reinforces that even ancillary data disclosures—such as trade‑pattern analyses, market shares, or financial projections sourced from third parties—must be verified and audit‑ready. Failure to comply can trigger punitive fines and reputational damage, and may delay or derail cross‑border deals that rely on timely regulatory clearance. Clients should review their merger due‑diligence protocols, enforce robust data‑verification checkpoints, and consider a dedicated compliance audit for all pre‑filing information. The incident also raises the bar for transparency: firms must anticipate that regulators will probe every data point, no matter how minor it seems.

These state statutes, taking effect this year and next, impose a suite of obligations on employers who use automated systems in consequential employment decisions. California’s No Robo Bosses Act (SB 947) bars sole reliance on AI for disciplinary and termination actions, requiring a corroborating human review and written employee notice. Colorado’s SB 26‑189 adds to that by demanding a plain‑language explanation within 30 days of adverse decisions and offering affected individuals a right to correction and meaningful human reconsideration. Other states echo these themes: Connecticut mandates written notice and AI‑specific disclosures for layoff warnings and adds that AI use is not a defense to discrimination claims, while Illinois moved toward notice provisions and the Fair Employment and Housing Act now treats AI‑enabled discrimination as actionable. Collectively, employers must audit AI workflows, establish robust human‑review procedures, and update policies to avoid legal exposure and potential claims under Title VII and state civil‑rights statutes. Clients should review existing

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The EEOC’s planned November‑2026 proposal will likely narrow the Pregnant Workers Fairness Act’s regulatory scope by excluding conditions such as infertility, contraception, menstruation, and past pregnancy, focusing coverage on current pregnancies and childbirth‑related restrictions. Despite the tightening, the agency is intensifying enforcement, bringing new lawsuits and settlements against employers who fail to provide simple accommodations—like light duty, leave, or modified duties—directly related to a present pregnancy or its complications. Employers currently face significant legal risk for not maintaining clear accommodation processes, training managers, and documenting requests. The regulatory tweak will not change the core requirement for reasonable accommodations, and the demanding enforcement spiral of the EEOC means firms must act now: update policies, train staff, document the interactive process, and monitor the NPRM’s comments window.

The Department of Labor has instituted a comprehensive update to the retirement‑plan year‑end protocol in 2026, expanding the scope of required amendments from the narrow set of disclosures it has historically mandated to a broader roster of changes affecting plan design, contribution limits, and fiduciary duties. Under the new guidance, employers who sponsor private 401(k) and similar plans must now amend plan documents at year‑end to reflect revised catch‑up contribution rules, updated regulatory exception language, and more stringent reporting on non‑qualified distributions. Counsel should begin anticipating the compliance burden by reviewing plan trust agreements, conducting gap analyses, and drafting amendment templates. If the plan’s broker or custodian has not yet signaled voluntary adjustments, firms should instruct clients to request amended compliance letters from the DOL guidance. Failure to comply could invite enforcement actions and penalties, so pre‑emptive alignment is essential as the December 31, 2026 deadline approaches.