Robo Boss Rejection: California Governor Newsom Pulls The Plug On AI Bill For Overly Broad Restrictions

Duane Morris Takeaways: On October 13, 2025, California Governor Gavin Newsom, issued a written statement declining to sign Senate Bill 7 – called the "No Robo Bosses" Act (the "Act"). While the Act aimed to restrict when and how employers could use automated decision-making systems and artificial intelligence, Governor Newsom rejected the proposed legislation in terms of the Act's broad drafting and unfocused notification requirements. Governor Newsom's statement reflects an initial rebuttal to a wave of pending AI regulations as states wrestle with suitable AI guidance. Given the pro-employee tendencies of Governor Newsom and California regulators generally, this outcome is a mild surprise. Employers nonetheless should expect continued scrutiny of AI regulations before enactment.

This legislative activity surely sets the stage for what many believe is the next wave of class action litigation.

Overview Of SB 7: The "No Robo Bosses" Act

The Act was first introduced in December 2024. After several amendments, it was passed by the Senate Committee on September 23, 2025 for review and signature by Governor Newsom. The Act's key proposals included prohibitions on employers solely using AI to make disciplinary or termination decisions, requiring human input for AI disciplinary or termination decisions, detailed advance notice requirements for use of AI in hiring or employment-related decisions, and post-notice requirements if an employer primarily relied on AI for disciplinary or termination decisions.

The Act focused on automated-decision making systems ("ADS") and "employment-related decisions." Under the Act, an ADS is defined as "any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decision making and materially impacts natural personals." With this definition, ADS incorporated a swath of technologies utilized by many employers such as call analytic tools, automated scheduling platforms, keystroke and computer monitoring software, and AI-based training programs. SB 7 also defined "employment-related decisions" as "any decision by an employer that materially impacts a worker's wages, benefits, compensation, work hours, work schedule, performance evaluation, hiring, discipline, promotion, termination, job tasks, skill requirements, work responsibilities, assignment of work, access to work training opportunity, productivity requirements, or workplace health or safety."

The Act also incorporated various pre-notice and post-notice requirements. Employers using an ADS system to make employment-related decisions (excluding hiring) would have been required to provide "pre-notice" at least 30-days before deploying an ADS, and 30-day notice to new hires for any ADS use. Similarly, the Act included "post-notice" provisions regarding post-notices when an employer relied on an ADS to make a discipline, termination, or deactivation decision, and to provide the impacted worker with notice at the time the employment decision is made. Both notices had requirements for the notice to be written in plain language, directed as a routine worker communication, and provided in an accessible format.

Violations under the "No Robo Bosses" Act included a proposed civil penalty of $500 per violation, with enforcement authority vested in the Labor Commissioner and public prosecutors of California. The proposed Act did not include a private right of action.

Governor Newsom's Veto Of The Act

Governor Newsom's veto of the Act centered on concerns of unspecified misuses of ADS technology and unfocused notification requirements. Governor Newsom did recognize the concerns associated with ADS in employment-making decisions but argued the Act's "proposed solution fail[ed] to directly address incidents of misuse." He also found that the restrictions embedded in the Act were broad and removed "a potentially valuable tool" when ADS systems are properly applied and properly employed. Governor Newsom's critique of the Act demonstrates that the Act did not distinguish the benefits of ADS systems compared to risks associated with ADS use cases. Accordingly, Governor Newsom vetoed SB 7.

Implications Of The Veto

California employers do not have to mitigate their ADS systems yet based on Governor Newsom's veto of SB 7, but given the Governor's comments, its possible new legislation will be introduced to narrow the use of ADS systems in employment decisions. Governor Newsom's veto of the Act further represents a growing concern among ADS systems and AI technologies legislative policies – namely that broad legislative efforts cannot efficiently or effectively address emerging technologies. While employers can expect other states may propound ADS and AI legislation in the context of employment decision-making, employers should consider that if the notoriously pro-employee State of California struck down legislation as overly broad and unfocused – it may take some time for other jurisdictions to determine how to finesse the legislative landscape.

Employers should continue to monitor federal developments in this area, as well. In July 2023, the federal "No Robot Bosses Act," S.2419, was introduced in the Senate. While the bill has not been enacted, its provisions include similar limitations on the use of automated systems and would require human oversight before an automated decision is finalized.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.