BAL Litigation Brief — July 2026: What employers and employees should know

Immigration litigation is no longer a peripheral compliance issue. Court decisions are increasingly influencing hiring strategies, workforce planning, sponsorship costs and employee mobility in real time.

For employers who rely on global talent, staying current on rapidly evolving litigation can be challenging. BAL’s Litigation Brief highlights key court decisions and legal developments affecting employers and foreign national employees, translating complex litigation trends into practical business guidance.

As litigation activity expands across federal courts and agencies, several trends have emerged in recent months:

• Work authorization risk is expanding across visa categories
• Litigation is shaping the cost of sponsorship and workforce planning decision
• Nationality-based restrictions are increasing compliance complexity

BAL’s Litigation Group monitors developments across federal courts and agencies and helps employers assess risk, maintain workforce continuity and respond strategically to legal change.

USCIS policy challenges

A series of recent cases reflects growing judicial scrutiny of U.S. Citizenship and Immigration Services policies affecting employment-based immigration, work authorization and benefit adjudications.

State of California v. Markwayne Mullin — H-1B proclamation legal challenges

Where things stand: On June 8, 2026, a federal court struck down implementation of the H 1B proclamation, declaring it “unlawful” and effectively blocking President Trump’s $100,000 petition fee requirement for new H-1B visas. On June 12, a federal district court temporarily paused the ruling pending an appellate court determination whether the pause should continue during the appellate process. Briefing on that issue was completed on July 2, and on July 24 the First Circuit Court denied the federal government’s request to reinstate the $100,000 H-1B petition requirement while the appeal is ongoing.

What it means for employers and employees:

• USCIS’s $100,000 fee is currently blocked while the appeal is ongoing.
• Employers who delayed hiring decisions, deferred sponsorship plans or reassessed hiring budgets because of increased filing costs may continue to face uncertainty while appellate proceedings remain pending.
• Employers should expect continued uncertainty regarding implementation of the fee while litigation is ongoing. Because there are already two divergent district court decisions, the issue is likely to generate further litigation and potential higher court review.

Key takeaways: Employers should continue evaluating H-1B sponsorship budgets, start dates and contingency plans, particularly for cases that may require consular notification or could otherwise be affected by the disputed fee requirement.

Dorcas v. USCIS — Four USCIS travel-ban related policies struck down

Where things stand: On June 5, 2026, a federal court vacated four USCIS policies tied to adjudication freezes affecting certain travel-ban countries, including the benefits hold, global asylum hold, comprehensive re-review policy and country-specific factors. USCIS issued a June 12 alert stating that the affected memoranda and policy alert should be treated as not in effect pending further litigation. On July 15, the district court denied the government’s request for a stay pending appeal, allowing the ruling to remain in effect while appellate proceedings continue.

The government’s renewed motion for a stay of the injunction pending appeal will be fully briefed before the First Circuit on or before Aug. 8. The First Circuit stated that it “intends to rule on the stay motion as soon as practicable following the completion of motion briefing.”

What it means for employers and employees:

• Employees whose applications experienced prolonged adjudication delays may see renewed movement on pending immigration benefits, including their Employment Authorization Document (EAD) applications.
• By removing the blanket freezes and the directive to consider an applicant’s nationality as a “negative discretionary factor,” employers may experience a more positive outcome for team members.
• The lift of the global asylum hold for affirmative asylum adjudications allows the process to resume but does not guarantee asylum will be granted for applicants.
• Backlog is an ever-present challenge, but employers need to remain vigilant in monitoring pending employee petitions.

Key takeaways: USCIS has appealed the decision and could raise its request to pause the ruling to the Supreme Court while the legal battle continues. Employers should review pending USCIS cases involving nationals of affected countries and consider whether previously delayed EADs, adjustment of status and nonimmigrant benefit applications may now move forward. Employers should continue monitoring the appeal because implementation obligations may change if a higher court grants a stay.

USCIS adjustment of status policy memo — Emphasizes closer scrutiny of AOS applicants

Where things stand: On May 22, 2026, USCIS issued a policy memo that did not change the rules regarding adjustment of status (AOS) eligibility but emphasized that USCIS officers must consider the totality of circumstances, including family ties, immigration status and history, moral character and “any other relevant factor” when adjudicating applicants.

What it means for employers and employees:

• The rules have not changed, but applicants should be prepared for increased requests for evidence and heightened scrutiny concerning discretionary factors, particularly where immigration history or other potentially adverse information is present. Applicants with derogatory information should consider whether additional favorable evidence may help address discretionary concerns.
• It will be of greater importance that the employee maintains an underlying nonimmigrant status while pursuing the AOS, in the event there are issues with the case.
• AOS will remain the primary pathway for individuals in the United States to apply for permanent resident status (i.e. a green card).
• Because the guidance appears to place renewed emphasis on discretionary review and may depart from longstanding adjudicatory practice, it may invite future legal challenges.

Key takeaways: Employers should encourage employees pursuing AOS to maintain valid underlying nonimmigrant status where possible, timely respond to requests for evidence and work closely with counsel to identify any facts that could trigger discretionary scrutiny.

Doe v. DHS — Work permit restrictions to H-4 visa holding spouses challenged

Where things stand: On Jan. 8, 2026, a group of seven H-4 spouses of H-1B visa holders filed a lawsuit challenging the Trump administration’s October 2025 interim final rule (IFR) that ended automatic 540-day work permit extensions for renewals of EADs.

What it means for employers and employees:

• Despite the pending litigation, the rule remains in effect for the underlying H-4 EAD program. Affected H-4 spouses may face employment interruptions if renewal applications remain pending after EAD expiration.
• Counsel for the plaintiffs has indicated that the court was not planning to vacate the rule in its entirety. Thus, any win will likely be limited to only the seven plaintiffs named in the lawsuit.
• USCIS plans to publish a final rule following notice and comment that could impact the outcome of this case and similar lawsuits.

Key takeaways: Affected employees could benefit from separate litigation challenging the IFR as applied to their EADs. Employers should identify employees whose work authorization depends on H-4 EAD renewals, track expiration dates closely and prepare for possible employment interruptions if renewals are not approved before current EADs expire. Because USCIS processing times for H-4 EAD renewals can range from six months to over a year, applicants should file their renewals as far in advance as the rules allow.

TPS terminations and EAD extensions — Litigation continues for several countries

Where things stand: A succession of multiple court orders this year have paused or altered the Temporary Protected Status (TPS) terminations and automatically extended EAD validity dates for several countries, including Burma (Myanmar), Ethiopia, Haiti, Lebanon, Somalia, South Sudan, Syria and Yemen. On June 25, 2026, in Mullin v. Doe, the U.S. Supreme Court ruled 6-3 that federal courts cannot review the government’s decision to end TPS, allowing the Department of Homeland Security to terminate TPS for Haiti and Syria.

What it means for employers and employees:

• Employers will be subject to substantial Form I-9 reverification obligations to ensure that employees whose work permits are tied to TPS have valid, alternative work authorization to remain legally employed.
• Employers should closely track country-specific TPS announcements and litigation developments because work authorization validity periods may vary significantly by nationality, Federal Register notice and court order.
• The respective court orders for the countries identified above have automatically extended the validity dates of the EADs previously issued under their respective TPS designation. The auto-extended EAD validity dates can be found on each country’s USCIS TPS page.
• Employees whose work authorization is tied to a TPS designation that has been terminated may ultimately lose employment authorization unless they qualify for another immigration status or independent work authorization.
• While constitutional claims may still be brought, Mullin v. Doe signaled that such claims face a high bar.

Key takeaways: Employers should conduct careful Form I-9 reverification planning for TPS beneficiaries and confirm applicable auto-extension dates on USCIS country-specific TPS pages.

Birthright citizenship and nationality-based policies

Litigation around nationality-based policies highlights an increasingly uncertain legal environment with potential long-term implications.

Trump v. Barbara — Birthright citizenship for U.S.-born children

Where things stand: On June 30, 2026, the Supreme Court held in Trump v. Barbara that children born in the United States to parents who are unlawfully or temporarily present are citizens at birth under the 14^th Amendment. The 6-3 decision rejected the administration’s attempt to limit birthright citizenship through executive order 14160 and reaffirmed the longstanding interpretation that individuals born on U.S. soil are generally “subject to the jurisdiction” of the United States for citizenship purposes.

What it means for employers and employees:

• The ruling avoids the need for employers and immigration programs to account for a new federal framework that would have treated some U.S.-born children differently based on their parents’ immigration status.
• Nonimmigrant employees on temporary visas have legal assurance that their U.S.-born children are entitled to full citizenship rights at birth.

Key takeaways: Nonimmigrant employees on temporary visas have legal certainty that their U.S.-born children are citizens at birth, reducing potential disruption to family-based planning, employee mobility and benefits-related documentation.

DACA litigation — Despite ongoing litigation, certain beneficiaries can still renew status

Where things stand: Deferred Action for Childhood Arrivals (DACA) remains in flux following a January 2025 Fifth Circuit ruling that would limit — but not eliminate — the program, with impacts concentrated in Texas. USCIS continues to accept and process DACA renewal requests and accompanying employment authorization applications, and current grants of DACA and related EADs remain valid until they expire, unless individually terminated. USCIS also continues to accept initial DACA requests but is not currently processing them.

The Fifth Circuit’s Texas-specific limitations on DACA-related employment authorization and lawful presence, as well as any potential resumption of initial DACA adjudications outside Texas, remain on hold pending further action by the U.S. District Court for the Southern District of Texas. The government has proposed an implementation framework, but that proposal remains subject to district court approval, and USCIS has not announced a timeline for implementation. A decision from the Southern District of Texas could come at any time.

What it means for employers and employees:

• Current DACA recipients: USCIS continues to accept and process renewal requests and related EAD applications. Existing DACA grants and EADs remain valid until expiration, unless individually terminated.
• Initial DACA requests: USCIS continues to accept initial requests but is not processing them at this time. Any resumption of initial DACA adjudications, including any distinction between Texas and non-Texas residents, remains subject to further order from the Southern District of Texas.
• Texas-related limitations: The Texas-specific limitations on DACA-based employment authorization and lawful presence have not yet been implemented. Employers should monitor the Southern District of Texas closely because a future order could affect DACA recipients or applicants with a Texas residence, employees relocating to Texas or employees whose USCIS address of record changes.
• Renewal delays and litigation options: DACA renewal processing delays are creating workforce-continuity risks, particularly because DACA-based EADs generally do not provide automatic work authorization extensions while a renewal remains pending. Where a renewal has been pending well beyond normal processing expectations and the delay threatens employment authorization, driver’s license renewal or continued employment, litigation may be an effective tool to compel agency action, including through mandamus or Administrative Procedure Act claims challenging unreasonable delay.

Key takeaways: Employers should not assume that the Fifth Circuit’s Texas-specific limitations or the proposed resumption of initial DACA adjudications outside Texas are currently in effect. For now, DACA renewals continue, initial requests are accepted but not processed, and employers should prepare for a Southern District of Texas implementation order that could be issued at any time. Employers should work with counsel to identify affected employees early, document business disruptions and evaluate whether litigation is appropriate on an individualized basis.

Preparing for what’s next in immigration litigation

As immigration policy increasingly develops through litigation rather than traditional rulemaking, employers should expect continued uncertainty affecting work authorization, sponsorship costs, adjudication standards and workforce planning.

Forward-looking organizations are responding by incorporating litigation monitoring into broader immigration compliance and talent strategies. Early identification of legal risk, proactive workforce planning and timely intervention in delayed cases can help minimize disruption and preserve access to critical talent.

Additionally, more employers with international employees are considering mandamus litigation to help “unstick” visas or green cards stalled in administrative processing, prolonged agency delays or extended security screening at U.S. embassies and consulates abroad.

BAL’s Litigation Group focuses on preserving workforce continuity to safeguard employer and employee interests and the unique challenges facing founders and startups. By combining litigation strategy with practical workforce planning, BAL helps organizations maintain business continuity in an increasingly dynamic legal environment.

The information provided in this article is for general informational purposes only and is not intended to be legal advice. While we strive to ensure the accuracy and completeness of the information, we make no guarantees regarding its applicability to your specific situation.